Nvidia Corporation has agreed to acquire a $5 billion stake in Intel Corporation, formalized as part of a strategic collaboration to develop multiple generations of data center and personal computer (PC) products. The investment involves Nvidia purchasing Intel stock at $23.28 per share. Following the announcement, Intel's shares experienced a surge of up to 30% in early trading on Thursday. This acquisition positions Nvidia as one of Intel's largest shareholders, holding approximately 4% of the company, according to Reuters.
The partnership focuses on integrating Nvidia's NVLink interface into future products, facilitating data and control code transfers between central processing units (CPUs) and graphics processing units (GPUs). NVLink offers faster transfer speeds compared to alternative standards such as PCI Express, a critical factor for artificial intelligence (AI) applications that demand high-speed coordination among numerous GPUs to manage substantial workloads.
For the data center segment, Intel will manufacture a new line of x86 CPUs specifically tailored for Nvidia's AI infrastructure platforms. These products are slated for offering to both enterprise and hyperscale customers. In the consumer PC market, the collaboration will result in Intel developing x86 system-on-chips (SoCs) that will incorporate chiplets from Nvidia's RTX GPUs. These co-developed chips, currently referred to as "x86 RTX SoCs," are projected to power a diverse range of PCs.
This agreement follows a period of significant market adjustment for Intel, which has faced challenges in capitalizing on the rapid expansion of the AI chip sector. The company recently appointed a new CEO, initiated staff reductions, and re-evaluated manufacturing projects to enhance financial discipline. Conversely, Nvidia reported a record quarter recently, solidifying its position as a leading semiconductor company by revenue and market capitalization. Intel CEO Lip-Bu Tan stated that Intel's "leading data center 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." The collaboration aims to enable Intel to regain market share, particularly against rivals like AMD, by aligning with Nvidia's strong presence in AI and accelerated computing.
