Intel Spikes 23% on Deal With Nvidia to Develop AI Hardware

Nvidia announced Thursday it would invest $5 billion in Intel and collaborate on custom chips for data centers and personal computers, sending Intel’s battered stock soaring 23% in early trading.

The investment, which would buy Nvidia roughly 215 million Intel shares at $23.28 each, comes just weeks after the Trump administration took a 10% stake in the struggling chipmaker.

As per the agreement, Intel will develop custom x86 CPUs optimized for Nvidia’s AI platforms, potentially solving longstanding bottlenecks in CPU-GPU communication. For personal computers, Intel will build system-on-chip designs incorporating Nvidia’s RTX graphics technology.

“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,” Nvidia CEO Jensen Huang said in the announcement. “Together, we will expand our ecosystems and lay the foundation for the next era of computing.”

Nvidia shares climbed 3%, pushing the company’s market value past $4 trillion, giving the company a breath of fresh air after the quick panic caused by a decision from China to ban its chips.

The deal throws Intel a lifeline at a critical moment. The company that once dominated Silicon Valley lost nearly $19 billion last year and another $3.7 billion in the first half of 2025. It plans to cut 25% of its workforce by year’s end

However, this is not just a lifeline, and the partnership is actually mutually beneficial. For Nvidia, it means deeper access to the x86 architecture that still powers most enterprise systems. For Intel, it’s a chance to leverage Nvidia’s AI dominance to stay relevant.

By teaming up, Intel can use Nvidia’s powerful AI technology in its own computer chips. This means businesses and regular people will get faster, “smarter” computers from Intel, all thanks to Nvidia’s know-how, keeping Intel a major player even as technology rapidly change

“Pop the champagne,” Dan Ives, tech analyst at Wedbush Securities, told Bloomberg. “It brings Intel into the AI game. This is also gonna viewed very positively in DC” he said

The Trump administration’s earlier intervention had already signaled Intel’s strategic importance. The government’s $8.9 billion investment for a 10% stake was part of broader efforts to secure domestic chip production amid tensions with China. Trump has threatened 100% tariffs on imported chips while negotiating export deals that let Nvidia and AMD sell lower-power AI chips to China in exchange for a 15% cut of sales.