• Nvidia acquires a 4% stake in Intel for $5 billion, announcing a partnership to co-develop AI data center and PC products.
  • The move follows the U.S. government's acquisition of a 10% stake in Intel last month, creating a powerful public-private backing for the chipmaker's turnaround.
  • Intel shares surged as much as 30% in early trading, signaling a dramatic shift in investor sentiment toward the beleaguered semiconductor giant.

Nvidia Corp. is making a stunning $5 billion wager on Intel Corp.’s recovery, acquiring an approximate 4% stake and initiating a deep collaboration to build next-generation AI hardware. The deal, confirmed by both companies early Wednesday, arrives just weeks after the U.S. government took a separate 10% stake in Intel, solidifying an unprecedented level of institutional support for the company as it battles to regain its footing.

For Intel, which has posted billions in losses over the past two years and is planning to reduce its workforce by 25% by the end of 2025, the investment is a critical vote of confidence. The partnership aims to leverage Nvidia’s dominant AI architecture with Intel’s manufacturing scale. "This lays the foundation for the next era of computing," Nvidia CEO Jensen Huang said in a statement. Efforts to reach Intel’s recently appointed CEO, Lip-Bu Tan, for additional comment were not immediately successful.

The U.S. government’s stake, acquired last month, was widely seen as a strategic move to secure domestic semiconductor production for national security reasons. Nvidia’s parallel investment now validates that strategy from a pure market perspective, according to people familiar with the negotiations. The dual backing creates a formidable alliance aimed at countering the rise of China’s tech sector and ensuring U.S. leadership in critical AI infrastructure. Regulatory approval for Nvidia’s stake is still pending, but is widely expected to be granted given the strategic context.

Intel’s shares reacted violently to the news, soaring as much as 30% in pre-market trading before paring some gains. The surge reflects a dramatic reassessment of Intel’s prospects, which had dimmed after the company missed major industry shifts toward mobile and AI computing. The collaboration with Nvidia, while unusual between two historic competitors, is seen as essential for Intel to quickly re-enter the AI arena with competitive products. The companies said their initial focus will be on integrated data center solutions and AI-powered PC platforms, with the first products expected to hit the market within 18 months.

This story has been updated to reflect the correct percentage of the U.S. government's stake in Intel, which is 10%.