‘NVIDIA is to Intel what MSFT was to Apple in 1997,’ said one market analyst about the new deal.
Shares of Intel increased by about 30 percent at the opening bell after Nvidia announced a $5 billion investment in the struggling chipmaker on Sept. 18, marking another round of capital injection for the tech firm.
The strategic partnership will see the two tech giants co-develop next-generation data centers and personal computing chips.
Intel will manufacture x86-based central processing units tailored for Nvidia’s artificial intelligence (AI) infrastructure, while also developing system-on-chips that integrate Nvidia’s RTX GPUs to power next-generation computing devices.
Nvidia CEO Jensen Huang says the key objective is to power “a new industrial revolution” by advancing AI applications for both consumers and enterprises.
“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. Together, we will expand our ecosystems and lay the foundation for the next era of computing,” Huang said in a news release.
Lip-Bu Tan, CEO of Intel, says his company’s chip architecture will complement Nvidia’s “leadership to enable new breakthroughs for the industry.”
“Intel’s x86 architecture has been foundational to modern computing for decades—and we are innovating across our portfolio to enable the workloads of the future,” said the release.
Nvidia will invest $5 billion in common stock at a purchase price of $23.28 per share.
The arrangement remains subject to regulatory approval.
Wall Street Reaction
Shares of Intel increased by as much as 30 percent at the opening bell, climbing above $30.
After falling to its lowest level in about a decade earlier this year, the stock has rebounded. This year, Intel shares have increased by more than 50 percent.
Intel has been rallying since speculation that the U.S. government would invest in the company. President Donald Trump confirmed in August that Washington would obtain a 10 percent ownership stake, or 433.3 million shares, in the chipmaker, worth $8.9 billion.
Japan’s SoftBank also announced a $2 billion investment in Intel last month.
By Andrew Moran
