Intel, the once-dominant US company, has been left trailing in the fast-growing AI chip market.
Nvidia has tabled a $5 billion investment in struggling rival Intel, a move that could reshape the balance of power in the global chip market.
The deal, still subject to regulatory approval, comes as Intel battles declining market share and mounting competition in the fast-growing artificial intelligence (AI) sector, where Nvidia has emerged as the dominant player.
Intel, the once-dominant US company, has been left trailing in the fast-growing AI chip market after years of management missteps eroded its competitive-edge.
As Intel looks to regain its mojo, last month the company entered into an agreement with the Trump Administration to support the continued expansion of American technology and manufacturing leadership.
Under terms of the agreement, the US government will make an $8.9 billion investment in Intel common stock.
Japanese-based multinational conglomerate SoftBank and Intel last month also signed a definitive securities purchase agreement, under which SoftBank will make a $2 billion investment in Intel common stock.
Last week, Intel announced key executive appointments as it looks to turn around its faltering fortunes.
In a statement today, the Nvidia and Intel announced a collaboration to jointly develop multiple generations of custom data centre and PC products that accelerate applications and workloads across hyperscale, enterprise and consumer markets.
The companies will focus on connecting Nvidia and Intel architectures using Nvidia NVLink — integrating the strengths of Nvidia’s AI and accelerated computing with Intel’s CPU technologies and x86 ecosystem.
For data centres, Intel will build Nvidia custom x86 CPUs that Nvidia will integrate into its AI infrastructure platforms and offer to the market.
For personal computing, Intel will build and offer to the market x86 system-on-chips (SOCs) that integrate Nvidia RTX GPU chiplets.
According to the firms, these new x86 RTX SOCs will power a wide range of PCs that demand integration of CPUs and GPUs.
Nvidia will invest $5 billion in Intel’s common stock at a purchase price of $23.28 per share. The investment is subject to customary closing conditions, including required regulatory approvals.
“AI is powering a new industrial revolution and reinventing every layer of the computing stack — from silicon to systems to software. At the heart of this reinvention is NVIDIA’s CUDA architecture,” says Nvidia founder and CEO Jensen Huang.
“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.”
“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,” says Lip-Bu Tan, CEO of Intel.
“Intel’s leading data centre and client computing platforms, combined with our process technology, manufacturing and advanced packaging capabilities, will complement NVIDIA’s AI and accelerated computing leadership to enable new breakthroughs for the industry. We appreciate the confidence Jensen and the Nvidia team have placed in us with their investment and look forward to the work ahead as we innovate for customers and grow our business.”
