Nvidia’s $5B Lifeline Sends Intel Soaring 30%

Nvidia and Intel set the technology world buzzing Thursday with a surprise tie-up that reshapes the competitive landscape of the semiconductor industry. Nvidia (NVDA) announced a $5 billion equity investment in Intel (INTC) at $23.28 per share, giving it more than 4% ownership of the U.S. chipmaker and aligning the two in a strategic partnership to jointly develop custom chips for data centers and personal computing. The announcement sent Intel stock surging more than 30% to above $32—its best levels since July 2024—breaking through the long-watched $25 resistance zone and extending a rally that has now reached roughly 80% since the start of August. Nvidia shares also advanced around 3% following the news, a welcome rebound after several days of weakness tied to fresh restrictions on its AI chips in China. The two companies will hold a joint conference call at 1 p.m. ET to detail the collaboration.

At the heart of the deal is a new roadmap for semiconductors that merges Nvidia’s strength in artificial intelligence and accelerated computing with Intel’s x86 architecture and manufacturing base. The companies will develop “multiple generations” of custom chips, leveraging Nvidia’s NVLink to tightly connect their hardware. For the data center market, Intel will design and build Nvidia-custom x86 CPUs, which Nvidia will integrate into its AI infrastructure platforms. On the PC side, Intel will create system-on-chips that embed Nvidia RTX GPU chiplets directly with x86 cores—an attempt to deliver integrated, high-performance chips for both consumers and enterprises. Importantly, the agreement does not cover Intel manufacturing Nvidia’s own flagship GPUs; instead, it represents a co-development strategy aimed at expanding the combined ecosystems of both firms.

For Intel, the move is nothing short of a lifeline. The company has spent much of the past decade losing ground in both process technology and product leadership, with repeated delays and margin erosion. Management has attempted to reboot its strategy with major moves, including last month’s government stake—an $8.9 billion infusion from Washington tied to CHIPS Act grants and defense contracts—and the recent sale of its Altera programmable chip unit to Silver Lake. Nvidia’s vote of confidence not only provides new capital but, more importantly, grants Intel relevance as a partner to the fastest-growing company in semiconductors. CEO Lip-Bu Tan framed the collaboration as validation that Intel’s x86 architecture and advanced packaging technologies remain critical to the industry. The partnership also gives Intel an opportunity to demonstrate the potential of its foundry and design capabilities without directly competing against Nvidia’s core GPU franchise.

For Nvidia, the decision marks both a strategic and financial bet. The company has been the undisputed leader in AI hardware, but it faces mounting geopolitical risks, including recent Chinese restrictions on AI chip sales. Partnering with Intel secures a U.S. manufacturing ally at a time when supply chain resilience is a top priority. It also offers Nvidia the chance to expand beyond its GPU-centric portfolio by leveraging Intel’s x86 ecosystem. CEO Jensen Huang called the deal “historic,” highlighting how fusing CUDA and accelerated computing with Intel’s CPU technologies could usher in “the next era of computing.” The move may also be seen as a hedge against Taiwan Semiconductor Manufacturing Co. (TSM), which currently fabricates Nvidia’s leading GPUs but faces uncertainty from U.S.–China tensions. If Nvidia can prove out collaboration with Intel, it could gain more flexibility in its long-term manufacturing strategy.

The collateral damage from this news was clear: shares of Advanced Micro Devices (AMD) slid more than 5% as investors reassessed the competitive dynamics. AMD has spent years carving out a strong position in the data center CPU market, while also competing head-to-head with Nvidia in GPUs. By aligning with Intel, Nvidia appears to have created a new joint rival that could pressure AMD on both fronts. Additionally, Reuters flagged that the partnership could present risks for TSM, which has been Nvidia’s primary manufacturer; while Intel is not slated to produce Nvidia’s GPUs under this agreement, any gradual shift of workloads toward Intel’s fabs would weigh on TSM’s dominance.

The market reaction to Intel’s stock was dramatic. After languishing near decade lows earlier this year, the stock has ripped higher on the back of government support, divestitures, and now Nvidia’s endorsement. Thursday’s surge through $25 marked a technical breakout, with shares now sitting at their strongest level in more than a year. Resistance does loom in the $33–35 area, and given the pace of gains—roughly 80% since August began—profit-taking would not be surprising. Still, the Nvidia alliance is a fundamental catalyst that could extend Intel’s rally if execution matches the ambition. For Nvidia, the bump was more modest, reflecting both the dilution of its new stake and continued questions around China demand, but the strategic implications could prove highly valuable over time.

Investors will be listening closely to the 1 p.m. ET joint call , where CEOs Jensen Huang and Lip-Bu Tan are expected to outline the roadmap and address questions around timelines, regulatory approval, and product integration. Key issues include how quickly new custom CPUs and PC chips could hit the market, whether Intel’s foundry capabilities will eventually take on Nvidia production, and how the companies will manage competition with existing partners.

In the meantime, the deal underscores how rapidly alliances are reshaping the semiconductor landscape in the AI era. Intel gains credibility, Nvidia gains optionality, and AMD finds itself squeezed. If Thursday’s stock reaction is any indication, Wall Street believes the balance of power in chips has shifted once again—and this time, the underdog Intel may have found a new lifeline in the arms of its former rival.