NEW YORK (AP) — Nvidia, the world's leading chipmaker, announced on Thursday that it's investing $5 billion in Intel and it will collaborate with the struggling semiconductor company on products.
Nvidia and Intel will team up to work on custom data centers that form the backbone of artificial intelligence infrastructure as well as personal computer products, Nvidia said in a press release.
Nvidia said it will spend $5 billion to buy Intel common stock at $23.28 a share. The investment is subject to regulatory
approvals.
“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," Nvidia CEO Jensen Huang said. “Together, we will expand our ecosystems and lay the foundation for the next era of computing.”
The two companies said they will work on “seamlessly connecting” their architectures.
For data centers, Intel will make custom chips that Nvidia will use in its AI infrastructure platforms. while for PCs products, Intel will build chips that integrate Nvidia technology.
The agreement provides a lifeline for Intel, which was a Silicon Valley pioneer that enjoyed decades of growth as its processors powered the personal computer boom, but fell into a slump after missing the shift to the mobile computing era unleashed by the iPhone’s 2007 debut.
Intel fell even farther behind in recent years amid the artificial intelligence boom that's propelled Nvidia into the world's most valuable company. Intel lost nearly $19 billion last year and another $3.7 billion in the first six months of this year, and expects to slash its workforce by a quarter by the end of 2025.
Nvidia, meanwhile, has soared because its specialized chips are underpinning the artificial intelligence boom. The chips, known as graphics processing units, or GPUs, are highly effective at developing powerful AI systems.
In premarket trading, Intel shares jumped 30%. Nvidia shares added 3%.
