Nvidia announces an investment of $ 5 billion in Intel as well as collaboration

Nvidia, the world’s leading flea manufacturer, announced Thursday that it is investing $ 5 billion in Intel and will collaborate with the semiconductor company in difficulty.

The two companies will associate to work on personalized data centers that form the backbone of artificial intelligence infrastructure as well as personal IT products, NVIDIA said in a press release.

NVIDIA said that it would spend $ 5 billion to buy Intel ordinary shares at $ 23.28 per share. The investment, which is subject to regulatory approvals, occurs a month after the United States government has taken a 10% stake in Intel.

“This historic collaboration closely associates the IA computer battery and accelerated Nvidia with Intel processors and the vast ecosystem X86 – a merger of two world class platforms,” ​​said Jensen Huang, CEO of Nvidia. “Together, we will broaden our ecosystems and launch the bases of the next IT era.”

The two companies said they would work on “transparently connect” their architectures.

In morning trading, Intel’s shares jumped 25%, its greatest percentage from a day in decade. NVIDIA shares have added 2%.

For data centers, Intel will make personalized fleas that Nvidia will use in its AI infrastructure platforms. While for PC products, Intel will create chips that incorporate NVIDIA technology.

The agreement provides an Intel life buoy, which was a pioneer of Silicon Valley who has experienced decades of growth while its processors fueled the computer boom, but fell into a crisis after missing the passage in the mobile computer era triggered by the beginnings of the iPhone in 2007.

Intel is even further in recent years in the middle of the boom in artificial intelligence that has propelled Nvidia into the most precious business in the world. Intel lost nearly $ 19 billion last year and an additional $ 3.7 billion in the first six months of this year, and plans to reduce their workforce by the end of 2025.

The American government intervened last month to obtain a 10%stake, making it one of the largest shareholders in Intel. Federal officials said they had invested in Intel in order to strengthen American technology and national manufacturing.

The agreement is “optimistic for US Tech”, said Wedbush Securities analyst Daniel Ives, in a customer note.

“This is a gaming agreement for Intel because it now brings them to the front and center in the AI ​​game,” said Ives. “With the recent American government investment for 10% (equity participation in Intel), it was a few weeks of gold for Intel after years of pain and frustration for investors.”

Nvidia, meanwhile, has skyrocketed because its specialized chips underlie the boom of artificial intelligence. Fleas, called graphic treatment units, or GPU, are very effective in developing powerful AI systems.

The agreement between the two flea manufacturers comes while China moves to be less dependent on the technology of American semiconductors. This week, Chinese officials would have prohibited several major national technologies companies to buy NVIDIA fleas, and Huawei announced that it was extending its development of fleas and AI manufacturing.

While Nvidia and Intel will work together to develop new fleas, a manufacturing agreement has not yet been concluded between the two. Potential access to Intel Chip foundries by NVIDIA has a risk for Taiwan Semiconductor Manufacturing Company, which is currently manufacturing the flagship processors of the technology giant.