Nvidia Is Forking Over $5 Billion For A Piece Of Intel
Currently, two of the biggest names in the global tech field, particularly out of the United States, are Intel and Nvidia. However, while Nvidia has been on a steady rise year over year, Intel has been running into speedbumps with roughly the same consistency.
A lack of commitment to market trends over the last decade or two, particularly in regards to the rush toward AI PC development, has left Intel firmly behind the curve; especially compared to Nvidia, which already makes its own AI-ready chips. While Nvidia and Intel have long been considered rivals in the American sector, it seems the former has decided to extend an olive branch to the latter. In an announcement last week, Nvidia revealed that it would be making a sizable investment into Intel, purchasing about $5 billion of Intel's common stock at $23.28 a pop.
Altogether, this investment totals to a roughly 4% stake in the company which, while not a majority, is certainly not insignificant either. This has led to an impressive short-term windfall for Intel: Not only has it secured the support of its largest competitor, but Nvidia's investment is even larger than the most recent investment from the United States government made in August.
Intel received a major stock boost from the deal's announcement
Shortly following the news of Nvidia's stock purchase, Intel's stock value rose with renewed vigor. Individual Intel share values increased by over 25% to $31.79 apiece, and Nvidia itself saw a healthy bump of 3% to its own stock value as well. Nvidia has become one of the most valuable publicly-traded companies in the world, both in and out of the tech sector, though it has been waging war with the likes of Microsoft and Oracle over the latest commercial tech advancements; particularly AI and its relevant hardware.
Even though Intel is not quite the power player it used to be, its presence in the field is not insignificant, and this new partnership between it and Nvidia could lead to monumental new strides in chip development for personal devices and data centers. Intel's experience in CPU development will help Nvidia to diversify beyond its specialization in GPUs and stand out amongst the other major graphics card brands, while Nvidia's contributions will help keep Intel competitive.
Intel chief executive Lip-Bu Tan seemed enthusiastic about the team-up, calling it a "game-changing partnership."
"The culture I want to have is really lean, fast-moving," Tan said in a statement obtained by the New York Times. He added that Intel will benefit especially from Nvidia's high-speed engineering team.