Nvidia buys $5 billion in Intel’s stake and plans to collaborate with AI chips

Nvidia has agreed to buy $5 billion in Intel as part of a broader deal to develop “multi-generation” of data centers and PC products.

Nvidia acquires Intel shares at $23.28 per share. This will slightly discount the company’s previous transaction price. According to Reuters, the deal makes Nvidia one of Intel’s largest shareholders, owning about 4% of the company. Intel shares rose 30% in early trading on Thursday morning.

Companies use NVIDIA’s NVLink interface to integrate two architectures. This allows data and control code transfer between the CPU and GPU. NVLink allows faster transfers between chips compared to other standards like PCI Express. This is extremely important for AI applications, and requires many GPUs to run together to handle immeasurable workloads.

For data centers, Intel will manufacture a new line of X86 CPUs specifically tailored for NVIDIA’s AI infrastructure platform, offering it to enterprises and hyperscale customers.

For the Consumer PC segment, Intel builds X86 System-on-Chips with Nvidia’s RTX GPU shiplets. Companies currently call these chips “x86 RTX Socs” and claim that these chips provide power to “a wide range of PCs.”

The deal comes after a rough few years for Intel, which is struggling to take advantage of AI chip racing, unlike its new partners. Intel brought in a new CEO and tried to strengthen margins, laying off thousands of staff and surged manufacturing projects to prioritize more financial discipline.

The deal grew shortly after another record quarter for Nvidia, which grew into both the world’s most lucrative semiconductor companies, and at market capitalization, one of the world’s largest companies. During the same period, Intel has struggled to meet fluctuating market demand, particularly the intense semiconductor demand of AI. As a result, this collaboration will allow Intel to regain market share from rivals like AMD.

“Intel’s leading data centers and client computing platforms, combined with process technology, manufacturing and advanced packaging capabilities, complement NVIDIA’s AI, accelerate computing leadership and enable new breakthroughs in the industry.”