Nvidia announced plans to acquire a $5 billion stake in rival Intel, agreeing to co-develop both data center and PC chips in a strategic partnership between two of the semiconductor industry’s largest players. The deal comes just weeks after the U.S. government took a 9.9% stake in Intel with an $8.9 billion investment, underscoring the company’s critical role in America’s technology and supply chain strategy. 

Nvidia will purchase Intel shares at $23.28 each, slightly below Wednesday’s closing price but above the government’s $20.47 entry point. The transaction, pending regulatory approval, will make Nvidia a 4% shareholder in Intel. 

Under the collaboration, Nvidia will design custom processors for data centers to be sold alongside its AI GPUs, while ensuring seamless high-speed communication between its chips and Intel’s. For the PC market, Intel will integrate Nvidia’s RTX GPU into its chips, offering a new level of graphics performance for consumer computing. 

“AI is powering a new industrial revolution and reinventing every layer of the computing stack — from silicon to systems to software. At the heart of this reinvention is NVIDIA’s CUDA architecture,” said Jensen Huang, founder and CEO of Nvidia. 

“Intel’s leading data center and client computing platforms, combined with our process technology, manufacturing, and advanced packaging capabilities, will complement NVIDIA’s AI and accelerated computing leadership to enable new breakthroughs for the industry,” added Lip-Bu Tan, CEO of Intel.