Nvidia Puts $5 Billion Into Intel, the Rival It Left Behind

The chip maker that won the AI boom is buying a roughly 4 percent stake in the one that missed it, and the two will design chips together. Intel's shares rose 22 percent, its best day in nearly four decades.

Nvidia said today it will invest $5 billion in Intel, buying common stock at $23.28 a share — enough to make it one of Intel's largest shareholders, with about 4 percent of the company. The two will also design products together: Intel will build Nvidia's graphics technology into future personal-computer chips, and supply its processors for data-center systems built around Nvidia hardware. Intel's stock rose 22 percent on the news, its best single day in nearly 38 years.

The reversal here is worth sitting with. For most of the last forty years Intel was the most important chip company in the world — the "Intel Inside" sticker was on nearly every computer sold. Nvidia made graphics cards for video games. Then it turned out that the chips built to draw game graphics were also the best hardware for running AI, and within a few years the two companies traded places. Intel, which largely missed the shift, has spent this year losing money and shedding staff. Nvidia has been the most valuable company on earth.

The investment follows the U.S. government taking its own large stake in Intel last month, part of an effort to keep advanced chip manufacturing on American soil. Between Washington and Nvidia, the company that once defined the industry is now substantially owned by parties that need it to survive for reasons beyond its own performance.

For Nvidia the logic is less charitable than it looks. It gets a partner in personal computers, where it is weak, and it helps ensure that the American chip industry it depends on does not narrow to a single point of failure. For Intel it is a lifeline, and an admission of how the last decade went.