Nvidia seals strategic partnership on next-gen AI chips with Intel

• Strategic marriage could give Intel an advantage over competitors like AMD, whose chips historically haven’t been as deeply integrated with Nvidia’s.
• Deal also has strong geopolitical undertones, considering previous US administration efforts to safeguard the country’s tech infrastructure and reduce reliance on Asian manufacturing.

Nvidia’s $5 billion investment in Intel has sent ripples through the global semiconductor industry, marking a dramatic twist in the AI hardware race.

By acquiring roughly four per cent stake in Intel, Nvidia cements a powerful partnership designed to create multiple generations of chips that unite Intel’s processors with Nvidia’s industry-leading AI and graphics technology.

Inside the Nvidia-Intel alliance

What’s particularly exciting about this alliance is how it leverages both companies’ strengths. The duo plans to co-develop chips using Nvidia’s NVLink technology, a proprietary connection that enables ultra-fast communication between processors—a crucial feature for data centres and AI workloads.

Intel will supply central processors and handle advanced packaging for these joint products, while engineers from both firms collaborate to bring Nvidia’s designs to life inside Intel’s fabrication process.

The strategic marriage could give Intel an advantage over competitors like AMD, whose chips historically haven’t been as deeply integrated with Nvidia’s.

Industry analysts believe that even though Nvidia hasn’t committed to manufacturing its own chips with Intel’s next-generation 14A process, the sheer scale and potential popularity of these joint chips could secure the production volume Intel needs for its high-stakes manufacturing bets in 2027 and beyond.

In short, if these products take off, Intel’s future as a leading chipmaker could be back on track.

Strategic stakes and industry fallout

Nvidia’s move to become one of Intel’s largest shareholders is the latest in a series of dramatic shifts for the legacy chipmaker. The $5 billion influx follows earlier investments from SoftBank and a historic $5.7 billion stake purchased by the US government—a deal orchestrated after President Trump raised concerns about Intel’s global ties and national security implications.

For Nvidia, the partnership brings it closer to Intel’s vast customer base, including businesses and governments with decades of reliance on Intel software and hardware.

The deal also has strong geopolitical undertones, considering previous US administration efforts to safeguard the country’s tech infrastructure and reduce reliance on Asian manufacturing.

Meanwhile, AMD and Broadcom face new risks. AMD’s strides in PCs and data centres may lose ground if the new Intel-Nvidia chips, with their high-speed integration, become the standard. Broadcom—whose technology helps key customers like Google build AI chips—also faces a tougher competitive landscape.

New Intel CEO Lip-Bu Tan faces high expectations. He has promised to slim down Intel’s operations and build factory capacity based strictly on market demand. Nvidia’s major investment is a jolt of confidence: Wall Street responded with a 23% jump in Intel shares after the announcement.

As part of this evolving partnership, Intel and Nvidia will develop new PC and data centre chips over multiple product generations. While Nvidia stops short of moving all its manufacturing to Intel’s foundries—still relying on TSMC for some of its flagship processors—the groundwork is laid for deeper collaboration, or even a future acquisition, as some analysts suggest.

Ultimately, the Nvidia-Intel pact isn’t just another corporate alliance. It’s a reset button for Intel at the dawn of the AI age, forcing rivals to adapt as two storied tech titans bet big on the future of chipmaking, data centers, and artificial intelligence.