Nvidia Injects $5 Billion into Intel, Sparking AI Chip Alliance

In a move that could reshape the future of the U.S. semiconductor industry, Nvidia has invested $5 billion in Intel, becoming one of the struggling chipmaker’s largest shareholders with about a 4% stake. The announcement sent Intel’s shares soaring by 23% and marks a turning point for a company long seen as lagging in the artificial intelligence race.

Nvidia Backs Intel $5B

Intel, once Silicon Valley’s crown jewel, has struggled with delays, leadership changes, and rising competition from AMD and Taiwan’s TSMC. Earlier this year, Intel appointed Lip-Bu Tan as CEO after a turbulent period that even drew criticism from U.S. President Donald Trump. The U.S. government recently secured a 10% stake in Intel to stabilize its future, alongside a $2 billion investment from SoftBank.

Now, Nvidia’s backing signals a powerful new alliance. Both companies announced plans to co-develop chips for PCs and data centers, though Nvidia will not rely on Intel’s foundry to produce its GPUs. Instead, Intel will provide central processors and packaging technology to be paired with Nvidia’s AI chips, creating products capable of faster communication speeds — a critical edge in the AI market.

Industry analysts suggest the partnership could challenge Taiwan’s TSMC, which currently manufactures Nvidia’s flagship chips. It also places pressure on AMD and Broadcom, whose data-center and chip-to-chip connection technologies face potential disruption.

“This is a massive game-changer for Intel and effectively resets its position in AI infrastructure,” said Gadjo Sevilla, senior AI and tech analyst at eMarketer.

For Nvidia, whose GPUs fuel the global AI boom, the move secures a strategic foothold in Intel’s ecosystem. For Intel, it’s more than just funding — it’s a lifeline that could redefine its place in the chip race.

The companies did not disclose when their joint products will launch but confirmed they are working on “multiple generations” of new processors. With Nvidia’s support and U.S. government backing, Intel’s future looks more stable than it has in years, though the global chip war is far from over.