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One of the world\u2019s most valuable companies is throwing Intel a lifeline.<\/p>\n
Nvidia, which has a market cap of $4.3 trillion, said today that it will invest $5 billion in Intel, the struggling US chipmaker that was recently at the center of an unorthodox investment deal with the US government. Intel shares jumped more than 30 percent following the news.<\/p>\n
The two American chipmakers are also entering into a product collaboration. Intel said in a statement early Thursday morning that \u201cIntel\u2019s leading CPUs and x86 ecosystem will be seamlessly connected with Nvidia\u2019s AI and accelerated computing capabilities using NVLink,\u201d referring to Nvidia technology that connects CPUs with GPUs.<\/p>\n
Intel CEO Lip-Bu Tan posted a photo on X with Nvidia cofounder and CEO Jensen Huang. Tan wrote that he was excited to team up with his \u201cgood friend Jensen\u201d to jointly develop custom data center and PC chips.<\/p>\n
In a press briefing, Huang emphasized that the deal will allow Nvidia to scale its rack architecture systems that combine 72 GPUs with custom CPUs. Huang also said that working with Intel means Nvidia can take a bigger slice of the personal device market. \u201cThere are 150 million laptops sold per year,\u201d he said. \u201cWe\u2019re now creating a system-on-a-chip that fuses two processors into one giant SoC, and that will become a new class of integrated laptops that the world has never seen before.\u201d<\/p>\n
Huang estimated that the deal represents between \u201c$25 billion and $50 billion of annual opportunity.\u201d<\/p>\n
Nvidia\u2019s investment comes on the heels of the US government taking a roughly 10 percent stake in Intel by converting billions of dollars in CHIPS Act grants into an equity investment.<\/p>\n
The US government has also been reevaluating export controls, which have limited Nvidia\u2019s (and AMD\u2019s) ability to sell advanced GPUs to China. The administration recently said that it would grant export licenses to Nvidia and AMD, enabling them to sell certain chips to China, if the companies gave the US government a 15 percent cut of the proceeds.<\/p>\n
Huang insisted that the Trump administration was not involved in Nvidia\u2019s talks with Intel, which, according to Huang, have been going on for nearly a year. \u201cThe Trump administration had no involvement in this partnership at all,\u201d Huang said. \u201cThey would have been very supportive, of course. Today, I had the opportunity to tell [Secretary of Commerce, Howard Lutnick], and he was very excited and supportive of seeing American technology companies working together.\u201d<\/p>\n
Still, says Pat Moorhead, founder and principal analyst at Moor Insights & Strategy, \u201cI do believe Nvidia scores points with the administration by making this investment.\u201d<\/p>\n
\u201cThe administration\u2019s move to take a stake in the company definitely gives some momentum for Intel to attract more external investments, like the earlier investment from SoftBank, and today, Nvidia,\u201d says Ray Wang, research director for Semiconductors and emerging tech at the Futurum Group.<\/p>\n
Wang also noted that the initial announcement of a partnership between Intel and Nvidia didn\u2019t mention Intel\u2019s Foundry Services, which offers the most advanced chip design and manufacturing opportunities to Intel customers. Nvidia largely relies on Taiwan Semiconductor Manufacturing Company for those services. (TSMC also manufactures some of Intel\u2019s chips.)<\/p>\n
During the press briefing, Tan and Huang were asked about whether Nvidia would be taking advantage of Intel\u2019s Foundry. Both executives demurred. Tan said that today\u2019s announcement was more of a \u201cproduct collaboration announcement,\u201d and noted that Intel will continue to make progress on its Foundry chips, and that the two entities will determine if Intel will provide these services to Nvidia at a later date. Huang, for his part, underscored Nvidia\u2019s working relationship with TSMC.<\/p>\n
Another reporter asked Huang: Why did Nvidia feel it was appropriate or necessary to make an equity investment in Intel along with a product collaboration?<\/p>\n
Speaking with vigor, Huang said that it\u2019s because he thinks \u201cit\u2019s going to be such an incredible investment. It\u2019s going to be fantastic for Intel. It\u2019s going to be fantastic for us \u2026 so we\u2019re delighted to be a shareholder. We\u2019re delighted to have invested in Intel. The return on that is going to be fantastic.\u201d<\/p>\n
Tan replied by saying that his top priority is to strengthen Intel\u2019s balance sheet, and then to drive more strategic partnerships like the one just announced with Nvidia. \u201cOur team and Intel will work really hard to make sure it\u2019s a good return for you,\u201d he said to Huang.<\/p>\n","protected":false},"excerpt":{"rendered":"
Save StorySave this storySave StorySave this story One of the world\u2019s most valuable companies is throwing Intel a lifeline. Nvidia, which has a market cap of $4.3 trillion, said today that it will invest $5 billion in Intel, the struggling US chipmaker that was recently at the center of an unorthodox investment deal with the […]<\/p>\n","protected":false},"author":1,"featured_media":32787,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[],"class_list":{"0":"post-32786","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"_links":{"self":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/posts\/32786","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/comments?post=32786"}],"version-history":[{"count":0,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/posts\/32786\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/media\/32787"}],"wp:attachment":[{"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/media?parent=32786"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/categories?post=32786"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/agooka.com\/news\/wp-json\/wp\/v2\/tags?post=32786"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}