In a move that’s set Silicon Valley abuzz and sent shockwaves through the global chip industry, Nvidia announced on September 18, 2025, that it will invest $5 billion in Intel and embark on a landmark partnership to jointly develop chips for PCs and data centers. The deal, which instantly makes Nvidia one of Intel’s largest shareholders with a roughly 4% stake, comes on the heels of the U.S. government’s own extraordinary 10% stake acquisition in Intel just weeks earlier—an intervention rarely seen outside major financial crises, according to The New York Times.
For Intel, the news couldn’t have come at a more critical time. Once the undisputed king of semiconductors, Intel has spent the past two decades grappling with missed opportunities, technical missteps, and fierce competition from rivals like Nvidia, AMD, and Broadcom. Its struggles culminated in a string of CEO changes, declining sales, and a bruised reputation. The latest blow came when construction of its ambitious $28 billion manufacturing facilities in Licking County, Ohio—a project slated to open this year—was delayed until at least 2030 due to ongoing business challenges, as reported by Reuters.
But Nvidia’s $5 billion lifeline, coupled with the U.S. government’s earlier $9 billion investment and a $2 billion infusion from Japan’s SoftBank, has given Intel a sudden and dramatic boost. The company’s shares surged more than 25% to $31.79 on the day of Nvidia’s announcement, lifting Intel’s market value to $143 billion and capping a remarkable 52% rise for the year. Nvidia, for its part, saw its shares climb nearly 4%, with a market capitalization now exceeding $4 trillion, underscoring its status as the world’s most valuable public company.
The partnership itself is a bold bet on the future of artificial intelligence and advanced computing. Nvidia and Intel plan to co-develop chips that combine Intel’s central processing units (CPUs)—the “brains” of computers—with Nvidia’s powerful graphics processing units (GPUs), which are the workhorses behind today’s AI revolution. According to The New York Times, the companies will leverage Intel’s venerable x86 architecture, a mainstay of the PC era, to appeal to businesses and researchers demanding massive computing power for data centers and AI applications.
Jensen Huang, Nvidia’s charismatic CEO, described the partnership as a chance to break new ground. “We’re going to build revolutionary products; first-of-its-kind products,” he said. He emphasized that the deal opens a market segment for Nvidia worth an estimated $50 billion—a space the company had never addressed before. Intel CEO Lip-Bu Tan, who took the helm in March 2025, echoed the optimism, calling it a “game-changing partnership” and expressing his commitment to making Intel leaner and more agile. “The culture I want to have is really lean, fast-moving,” Tan told The New York Times. He added that working with Nvidia’s engineering team, famed for its speed and innovation, would be a major asset for Intel.
Despite the headline-grabbing investment, the deal is carefully structured. Nvidia will pay $23.28 per share for Intel’s common stock—a price slightly below Intel’s previous closing but above the $20.47 paid by the U.S. government. Importantly, the partnership does not involve Nvidia manufacturing its chips at Intel’s foundries. Instead, Intel’s foundry business will supply central processors and advanced packaging for the joint products, while Nvidia continues to evaluate Intel’s manufacturing technology. The companies have committed to producing multiple generations of future products, but have not disclosed when the first chips will hit the market.
The strategic implications are far-reaching. For Intel, the partnership is a shot at redemption—a chance to regain relevance in the booming AI space after years of lagging behind. Tech analyst Dan Ives summed up the sentiment in a note cited by CNN: “This is a game changer deal for Intel as it now brings them front and center into the AI game. Along with the recent U.S. government investment for 10%, this has been a golden few weeks for Intel after years of pain and frustration for investors.”
For Nvidia, the collaboration is a way to diversify its offerings and tap into Intel’s vast customer base, especially those whose data centers are built around Intel’s CPUs and software. Previously, Nvidia’s custom chips relied on software from Arm, the British chip designer, but the new partnership allows it to serve businesses entrenched in Intel’s ecosystem. As Handel Jones, a semiconductor consultant, told The New York Times, the deal enables Nvidia to reach a new class of customers and further solidify its dominance in AI.
The ripple effects extend far beyond the two companies. The partnership poses a direct challenge to Taiwan’s TSMC, which currently manufactures Nvidia’s flagship processors, and to AMD, which has been steadily gaining market share in desktops and laptops. David Wagner, a portfolio manager at Aptus Capital Advisors, told Reuters, “AMD has been seizing market share in desktops and laptops for quite some time and this will help Nvidia out against its closest domestic peers, but I think TSMC may have the bigger risk to its operation over the long term.”
The deal also carries geopolitical weight. The White House has made AI and semiconductor manufacturing a national security priority, a stance reflected in its unprecedented stake in Intel funded by the Biden-era CHIPS and Science Act. President Donald Trump, who initially called for Intel CEO Tan’s resignation over concerns about his past work with Chinese firms, reversed his stance after a meeting with Tan in the Oval Office. Trump later praised Tan’s “success and rise” on social media and, during a state visit to the U.K., lauded Nvidia’s Huang, saying, “You’re taking over the world, Jensen.”
Yet, for all the optimism, challenges remain. The partnership does not resolve Intel’s most pressing business woes, such as its delayed Ohio factories and continued struggle to attract manufacturing customers. Patrick Moorhead, founder of Moor Insights & Strategy, cautioned, “Intel isn’t out of the woods yet. They have a lot to prove.” The company’s future hinges on whether it can deliver on the promise of this partnership and convince customers—and investors—that it can once again be a leader in the global chip race.
Meanwhile, the broader industry landscape is shifting rapidly. As China’s Huawei expands its own AI chip development and companies like Microsoft and Oracle pour billions into AI data centers, competition is only intensifying. For now, though, the Nvidia-Intel alliance marks a dramatic reset in Silicon Valley, with two longtime rivals joining forces in pursuit of the next wave of technological innovation. The stakes couldn’t be higher, and the eyes of the world—from Washington to Beijing—are watching closely.
With both companies betting big on a shared future, the semiconductor industry stands at the threshold of a new era—one defined not just by rivalry, but by the unlikely power of collaboration.
