Nvidia, the semiconductor company leading the artificial intelligence revolution, announced on Thursday that it was acquiring a $5 billion stake in its struggling competitor, Intel.
The two companies will also begin a partnership to develop chips together for PCs and data centers.
Intel shares surged more than 30% in pre-market trading on the announcement. Nvidia shares advanced about 3%.
This announcement from Nvidia came on Thursday just weeks after the U.S. government acquired a 10% stake in Intel, valued at nearly $9 billion, and after Japan’s SoftBank invested $2 billion.
Tech analyst Dan Ives wrote in a note on Thursday, “This is a game changer deal for Intel as it now places them at the forefront of the AI game. Combined with the recent U.S. Government investment for 10%, these have been golden weeks for Intel after years of investor pain and frustration.”
Ives concluded, “Today’s announcement further solidifies the U.S. lead in the AI Arms Race against China, as Intel transitions from a laggard to a catalyst.”
It is highly atypical for the U.S. government to hold stakes in private firms outside of significant financial crises. However, Intel has been facing challenges recently with several CEO changes and strategic shifts, falling behind Nvidia and other competitors like AMD and Broadcom in the mobile phone arena and AI arms race.
Intel CEO Lip-Bu Tan, appointed in March, faced pressure to resign from President Donald Trump in August. Trump remarked that Tan was “highly conflicted” after Sen. Tom Cotton, R-Ark., raised “concerns” in a letter about Tan’s previous work with Chinese companies.
“There is no other solution to this problem,” Trump added in the social media post.
Days later, Tan and Intel management met with Trump in the Oval Office. Trump’s tone toward Tan changed dramatically after that encounter. “The meeting was a very interesting one. His success and rise is an amazing story,” Trump wrote in a Truth Social post.
A week later, the administration and Intel announced the unprecedented investment in the company, using money from the Biden-era CHIPS Act.
At the same time, Nvidia CEO Jensen Huang has been a familiar face at Trump administration events. On Wednesday night, Huang attended the state dinner at Windsor Castle alongside Trump and King Charles III.
As part of Trump’s visit to the U.K., Nvidia announced it was plowing more than $14 billion into AI and data center infrastructure around the country.
At a news conference Thursday alongside U.K. Prime Minister Kier Starmer, Trump gave Huang a shoutout: “You’re taking over the world, Jensen.”
This is a developing story. Please check back for updates.
