Jensen Huang on $5B Intel deal: "We will lay the foundation for the next era of computing”
"We appreciate the confidence Jensen and the NVIDIA team have placed in us with their investment and look forward to the work ahead as we innovate for customers and grow our business," said Intel CEO Lip-Bu Tan.
“This historic collaboration tightly couples NVIDIA’s AI and accelerated computing stack with Intel’s CPUs and the vast x86 ecosystem — a fusion of two world-class platforms. Together, we will expand our ecosystems and lay the foundation for the next era of computing,” said NVIDIA founder and CEO Jensen Huang after the announcement that the chip giant would invest $5 billion in Intel.
“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.”
Intel CEO Lip-Bu Tan shared a similar sentiment. “Intel’s x86 architecture has been foundational to modern computing for decades — and we are innovating across our portfolio to enable the workloads of the future,” said Tan. “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. We appreciate the confidence Jensen and the NVIDIA team have placed in us with their investment and look forward to the work ahead as we innovate for customers and grow our business.”
Nvidia on Thursday said it will invest $5 billion in Intel, throwing its weight behind the struggling U.S. chipmaker but stopping short of awarding Intel a crucial manufacturing contract.
Nvidia, whose chips power much of the global artificial intelligence boom, said in a statement it will pay $23.28 per share for Intel common stock, slightly below Intel’s Wednesday close of $24.90 but higher than the $20.47 price the U.S. government paid for a 10% stake in Intel last month.
Nvidia is set to become one of Intel's largest shareholders, likely owning 4% or more of the company once new shares are issued.
The investment marks a new opening for Intel after years of turnaround efforts failed to gain traction. The company, once the industry’s undisputed leader that put the “silicon” in Silicon Valley, appointed a new CEO, Lip-Bu Tan, in March. Tan has pledged to slim down operations and expand capacity only when demand justifies it.
Crucially, the deal does not involve Intel’s contract manufacturing business, known in the industry as a foundry, making chips for Nvidia. Analysts have long believed that for Intel’s foundry unit to survive, it will eventually need to win a major customer such as Nvidia, Apple, Qualcomm, or Broadcom.
Still, the deal bolsters Intel’s balance sheet, weeks after it announced a $2 billion investment from SoftBank and a $5.7 billion cash infusion from the U.S. government. Intel CFO David Zinsner recently told investors the company was in a “good cash position” and would not need much more capital until it begins heavy investment in 14A, its next-generation manufacturing process.
Under the partnership, Intel will design custom data center CPUs that Nvidia will package with its AI GPUs. A proprietary Nvidia technology will enable the Intel and Nvidia chips to communicate at higher speeds than before.
For consumer PCs, Nvidia will provide Intel with a custom graphics chip to pair with its CPUs, using the same high-speed links, potentially giving Intel an advantage over AMD.
