TMTPOST — Nvidia Chief Executive Jensen Huang said Thursday that the company’s $5 billion investment and technology partnership with Intel marks a new chapter for the two chipmaking rivals, describing the move as “an incredible investment” in the future of artificial intelligence and computing.
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The collaboration, which has been nearly a year in the making, will see the two companies co-develop chips for data centers and personal computers, blending Intel’s long-dominant x86 central processing units with Nvidia’s market-leading graphics processors. The announcement underscores how fortunes have shifted in Silicon Valley’s semiconductor hierarchy, with Nvidia now worth more than $4.25 trillion compared to Intel’s $143 billion market cap.
Huang told reporters that he personally worked with Intel’s newly appointed CEO Lip-Bu Tan on the agreement, calling Tan a “longtime friend.” The two executives have known each other for three decades. “We thought it was going to be such an incredible investment,” Huang said, adding that discussions stretched across several months before the final terms were reached last weekend.
Intel’s revenue chief Greg Ernst said in a LinkedIn post that the deal was finalized on Saturday after an intensive negotiation process. For Intel, the investment represents both financial support and a validation of its turnaround strategy under Tan, who replaced Pat Gelsinger earlier this year.
The partnership will allow Intel to sell CPUs for PCs and notebooks that directly integrate Nvidia GPUs, targeting a consumer market that Huang said is “underserved.” Meanwhile, data center operators will be able to deploy new AI systems powered by racks that combine Intel CPUs with Nvidia GPUs using NVLink, the high-speed interconnect that binds Nvidia’s most advanced hardware.
“We’ll buy those CPUs from Intel, and then we’ll connect it into super chips that become our compute node, which then gets integrated into a rack-scale AI supercomputer,” Huang explained.
According to Huang, the total addressable markets for these joint product lines amount to about $50 billion. “We’re going to become a very large customer of Intel CPUs, and we’re going to be a large supplier of GPU chiplets into Intel chips,” he said.
The agreement reflects the seismic changes driven by the AI boom. For decades, Intel CPUs were the dominant component in PCs and servers. But since the release of OpenAI’s ChatGPT in late 2022, demand for Nvidia’s GPUs has skyrocketed, as training and running large AI models often require multiple GPUs for every CPU.
Microsoft’s newly announced $4 billion AI data center, for instance, will rely heavily on Nvidia’s systems. Until now, those systems have used Arm-based CPUs. By bringing Intel back into the mix, Nvidia is signaling its openness to diversify suppliers while also securing a closer partnership with an American peer.
Importantly, Huang emphasized that the Intel deal will not affect Nvidia’s existing relationship with Arm or its reliance on Taiwan Semiconductor Manufacturing Company (TSMC) to produce its chips. The collaboration focuses instead on Intel’s packaging capabilities — the final stage of chipmaking where multiple components are integrated into one.
For Intel, the partnership arrives at a critical juncture. The company has struggled in recent years to maintain relevance in both manufacturing and AI computing. Its share price has fallen nearly 32% over the past five years, while Nvidia’s has soared more than 1,300%.
Since taking over in March, Tan has focused on stabilizing Intel by raising cash, cutting costs, and refocusing strategy. The company has received $8.9 billion in government support under the CHIPS Act, secured a $2 billion investment from SoftBank, and sold assets to Silver Lake and other investors. In July, it announced plans to cut 15% of its workforce by year-end.
Tan, who previously led Cadence Design Systems through a turnaround, expressed gratitude for Nvidia’s confidence. “I’d like to thank Jensen for the confidence in me, and our team and Intel will work really hard to make sure it’s a good return for you,” he said during Thursday’s call.
The deal also carries political weight. Intel remains the only U.S. company with the capability to manufacture advanced chips domestically, making it strategically important in Washington. Last month, the Trump administration took a 10% equity stake in Intel in exchange for federal support. While the White House was not involved in the Nvidia deal, officials welcomed the announcement.
“Intel’s new partnership with Nvidia is a major milestone for American high-tech manufacturing,” White House spokesman Kush Desai said.
Huang was in the U.K. earlier this week alongside President Donald Trump for a state dinner at Windsor Palace, where Nvidia announced new projects and investments. However, both Nvidia and U.S. officials clarified that the Intel agreement was negotiated independently.
Analysts say the Nvidia-Intel collaboration could reshape the competitive landscape of AI computing. By pairing Nvidia’s unmatched GPU technology with Intel’s CPUs and packaging capabilities, the two companies are poised to offer integrated solutions that rival systems from AMD and Arm-based providers.
Still, questions remain about Intel’s long-term ability to sustain investment in its manufacturing unit, Intel Foundry. While Thursday’s deal does not involve the foundry, both Huang and Tan suggested they remain open to future discussions on contract chip production.
For now, Huang is betting big that Intel will deliver. “We’ve always evaluated Intel’s foundry technology, and we’re going to continue to do it,” he said. “But today, this announcement is squarely focused on these custom CPUs.”
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