Nvidia (NVDA.US) announced a $5 billion investment in Intel (INTC.US), acquiring shares at $23.28, a discount to Wednesday's closing price. The two companies said they would collaborate on designing chips for PCs and data centers, combining Intel processors with Nvidia graphics technology.
This is an unprecedented alliance between former rivals, providing Intel with financial support and access to key solutions from the market leader in artificial intelligence. Following earlier investments by the US government and SoftBank, this move underscores the need to raise funds for development in the face of losing market share. CEO Jensen Huang emphasized that the combination of x86 and AI platforms creates the foundation for a “new era of computing.” For Intel, the collaboration is an opportunity to compete more effectively with AMD in the PC market and to better position itself in servers, where Nvidia's dominance has been unchallenged until now. The market is reacting euphorically, with Intel shares rising 20% in pre-market trading.
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