Nvidia, the world’s dominant maker of artificial intelligence chips, said Thursday that it would invest $5 billion in its struggling rival, Intel, in a deal that illustrates how booming demand for AI is reshaping the global technology industry.
The deal is a lifeline for Intel and highlights a reversal of fortune between two Silicon Valley companies. Once an industry leader, Intel has struggled to keep up with technology shifts to mobile devices and AI. Last month, the Trump administration agreed to buy a roughly 10% stake in the company to bolster its shaky financial position.
Nvidia, by contrast, has become geopolitically significant and the world’s most valuable public company, producing the key chips needed for developing AI. Jensen Huang, the company’s CEO, is an industry superstar and joined President Donald Trump in Britain this week for a state dinner at Windsor Castle.
But as companies like Microsoft and Oracle pour hundreds of billions of dollars into AI data centers, Nvidia and Intel set aside their long-standing rivalry to make AI chips that allow customers to tap into both companies’ engineering expertise and software systems.
News of the deal sent Intel’s shares soaring more than 25% to $31.79 on Thursday, while Nvidia’s stock rose about 3%. The value of the U.S. government’s stake in Intel, which it purchased for $20.47 a share late last month, also immediately increased.