Nvidia to acquire $5 billion of intel common stock

On September 18, NVIDIA and Intel announced a partnership to jointly develop multiple generations of customized data center and personal computer (PC) products, aiming to accelerate the operational efficiency of various applications and workloads in hyperscale, enterprise-level, and consumer markets. Additionally, NVIDIA will invest $5 billion in Intel common stock at a price of $23.28 per share.

Image Source: NVIDIA

This investment is subject to customary closing conditions, including obtaining necessary regulatory approvals. It is reported that the price of $23.28 per share is slightly lower than Intel's closing price of $24.90 on September 18, but higher than the $20.47 per share that the U.S. government paid last month to acquire a 10% stake in Intel.

After the completion of the new stock issuance, NVIDIA will become one of Intel's largest shareholders, with its stake in Intel possibly reaching 4% or more. It is worth noting that after Intel's years of transformation efforts have failed to yield results, NVIDIA's support brings a new opportunity for Intel.

According to the announcement, NVIDIA and Intel will focus on achieving seamless connection between NVIDIA and Intel architectures through NVIDIA's NVLink technology. This collaboration will integrate NVIDIA's strengths in artificial intelligence (AI) and accelerated computing with Intel's leading CPU technology and x86 ecosystem, providing cutting-edge solutions for customers.

In the data center field, Intel will create customized x86 CPUs for NVIDIA. NVIDIA will integrate these CPUs into its AI infrastructure platform and bring them to market.

In the field of personal computer applications, Intel will develop and launch x86 system-on-chips (SoCs) integrated with NVIDIA RTX GPU chiplets. These new x86 RTX system-on-chips will provide computing power support for various personal computers that require the integration of CPU and GPU.

Jensen Huang, founder and CEO of NVIDIA, stated: "AI is driving a new industrial revolution and reshaping every layer of the computing stack—from chips and systems to software. At the core of this transformation is NVIDIA's CUDA architecture. This historically significant collaboration tightly integrates NVIDIA's AI and accelerated computing stack with Intel's CPUs and vast x86 ecosystem, achieving the convergence of these two major platforms. We will work together to expand both ecosystems and lay the foundation for the next era of computing applications."

Intel CEO Lip-Bu Tan stated, "For decades, Intel's x86 architecture has been the cornerstone of modern computer applications. Currently, we are innovating across our full product portfolio to meet the demands of future workloads. Intel's leading data center and client computing platforms, combined with our process technology, manufacturing capabilities, and advanced packaging technology, will complement NVIDIA's leadership in AI and accelerated computing, bringing new breakthroughs to the industry. We appreciate Jensen Huang and the NVIDIA team's trust and investment in us, and we look forward to future collaboration, driving innovation for our customers, fostering business growth, and embarking on a new chapter together."

After the report was released, Intel's stock price rose by 12% in pre-market trading, while Nvidia's stock price increased by 2%.