AI Turns Rivals Into Allies as Nvidia Bets $5 Billion on Intel

News

1. AI Turns Rivals Into Allies as Nvidia Bets $5 Billion on Intel

2. AI is Redefining Due Diligence and Abu Dhabi Is Leading the Charge

3. XPENG Secures UAE Flying Car Permit, Recalls Thousands of EVs

4. How du is Shaping the UAE’s Connected and Inclusive AI Future

5. Research Reveals AI Front-Runners and Laggards in Europe, Middle East, and Africa

6. MoneyHash and noon Payments Partner to Boost Local Payments Across the Gulf

Nvidia Corp. will invest $5 billion in Intel Corp. as part of a strategic deal that will see the two giant chipmaking rivals co-develop products aimed at transforming how artificial intelligence (AI) workloads are run across data centers and personal computers, the companies said on Thursday.

The deal involves Nvidia purchasing Intel common stock at $23.28 a share, making it one of Intel’s largest external investors.

The investment, which remains subject to regulatory clearance, marks a rare alignment between two of the semiconductor industry’s fiercest rivals and comes at a time when generative AI is reshaping hardware demand globally.

As part of the agreement, Intel will design custom x86 central processing units tailored to work with Nvidia’s AI acceleration stack, including its graphic processing units (GPUs) and high-speed NVLink interconnects.

Nvidia, in turn, will integrate its RTX GPU chiplets into future Intel system-on-chip designs for personal computing.

“This historic collaboration tightly couples Nvidia’s AI and accelerated computing stack with Intel’s CPUs and the vast x86 ecosystem, a fusion of two world-class platforms,” said Jensen Huang, founder and chief executive officer of Nvidia, in a joint statement.

Intel said the partnership will focus on optimizing AI performance at both ends of the computing spectrum: high-performance data centers and increasingly AI-capable PCs.

The companies declined to disclose product timelines or terms beyond the share purchase agreement.

The collaboration does not include Intel Foundry Services, the company’s contract chipmaking arm, which had previously been in talks to  make some of Nvidia’s future chips. Instead, the focus is on design and integration.

Shares of Intel soared more than 28% in early trading following the announcement, while Nvidia’s stock rose nearly 3%.

Investors welcomed the news as a validation of Intel’s turnaround under CEO Lip-Bu Tan, and as a sign that Nvidia sees upside in a deeper x86 alliance even as it continues to dominate the GPU market.

“Intel’s long history of engineering excellence, combined with our renewed focus on modular architectures and systems innovation, makes this a natural evolution,” Tan said. “We’re proud to partner with Nvidia to bring next-generation compute platforms to life.”

The deal gives Nvidia broader access to the x86 installed base, particularly in the PC segment, where AI-native capabilities are emerging as a priority for consumers and enterprises alike.

It also allows Intel to position itself at the center of an AI boom that has largely passed it by in recent years, despite its leading market share in CPUs.

Bloomberg reported that the deal was finalized after months of quiet negotiations, with a focus on establishing technical workstreams that do not encroach on each company’s core business.

For Intel, that means no direct involvement in Nvidia’s accelerator roadmap. For Nvidia, it excludes any role in Intel’s contract foundry expansion.

The planned joint development efforts will involve Nvidia’s next-generation RTX chiplets being embedded within Intel-designed SoCs for personal computing. These machines are expected to support AI workloads such as real-time voice synthesis, generative image tools, and on-device inference without depending on cloud compute.

In the data center, the two companies will optimize systems to deliver faster memory access, reduced latency, and better throughput for AI training and inference. Intel’s custom CPUs will be engineered to align with Nvidia’s platform strategy, particularly for enterprise customers who rely on tightly coupled compute architectures.

Still, the alliance raises questions about market dynamics. Both companies compete with AMD, which has gained ground in data center and PC markets, and with ARM-based entrants such as Qualcomm and Apple, which are pushing their own visions of AI-native computing.

While AMD is unlikely to lose immediate share from the deal, analysts said it could face pressure if Nvidia-Intel systems become a preferred reference design for OEMs.

The deal also lands at a moment of geopolitical tension around chip supply chains. The two firms have different manufacturing strategies, with Nvidia relying primarily on Taiwan’s TSMC, while Intel is building new fabs in the US and Europe. Their collaboration, however, will be closely watched in Washington and Brussels, where policymakers are trying to balance innovation and industrial sovereignty.

Both companies stressed that the partnership supports US technology leadership and builds on recent investments from the CHIPS and Science Act.

Intel and Nvidia said further details would be shared in the coming months, including technical disclosures and joint developer engagements.