Nvidia makes historic $5 billion major chip deal bet on Intel

Nvidia has announced an iconic $5 billion investment in Intel, developing a powerful strategic partnership to jointly manufacture advanced chips for data centers and personal computers in a move that completely changes the competitive market of the global semiconductor industry.

The American technology company's big deal will see Nvidia acquire a high stake in Intel at $23.28 per share, potentially making it one of Intel's largest shareholders with approximately 4% ownership.

The investment provides paramount capital for semi-conductor-maker ongoing turnaround efforts but notably stops short of granting Intel an in demand contract manufacturing role for Nvidia's flagship processors.

GPU production company CEO Jensen Huang revealed in an official release: "This historic collaboration tightly couples Nvidia's AI and accelerated computing stack with Intel's CPUs and the vast x86 ecosystem, a fusion of two world-class platforms.”

The partnership's technical core involves Intel designing custom data center central processors that Nvidia will package with its industry-leading AI GPUs using proprietary connection technology.

Market reaction was immediate and influential, with Intel shares surging over 32% in premarket trading following the announcement.

In addition to that, competitors AMD and TSMC saw their stock decline, reflecting investor concerns about the new competitive threat posed by the Nvidia-Intel alliance.