Nvidia has announced plans to acquire $5 billion worth of Intel’s common stock, making it a significant shareholder in the troubled company. This investment comes shortly after the US government secured approximately a 10% stake in Intel.
The tech powerhouse, known for its artificial intelligence chips, will purchase shares at a price of £23.28 each. Following the issuance of new shares to facilitate the transaction, Nvidia is expected to hold around 4% or more of Intel.
Recently, the US government, under President Donald Trump, revealed an $8.9 billion investment in Intel’s common stock, describing the company as a “Great American Company” with a promising future. This move is part of the administration’s strategy to enhance semiconductor manufacturing in the US and maintain its leadership in the global chipmaking sector.
President Trump has indicated plans to impose tariffs on imported semiconductors, targeting those suppliers that have not committed to producing goods in the US.
Once a leading figure in the tech industry, Intel has struggled to keep up with competitors due to its failure to adapt to ongoing technological advancements. Since taking over as CEO in March, Lip-Bu Tan has been working to revitalise the company.
In addition to the investment, Nvidia and Intel have announced plans to collaborate on developing custom products for data centres and personal computing.
Analysts from Wedbush Securities have described this agreement as a transformative deal for Intel, positioning it centrally in the AI sector. They noted that this development strengthens the US’s competitive edge in the AI race against China, with Intel transitioning from a laggard to a pivotal player.
Following the announcement, Intel’s shares experienced a significant increase, rising by 25%, while Nvidia’s stock also saw a boost of 2.1%.