Nvidia to Buy $5 Billion Stake in Intel, Giving Rival a Lifeline

Nvidia, the world’s dominant maker of artificial intelligence chips, said on Thursday that it would invest $5 billion in its struggling rival, Intel, a deal that illustrates how booming demand for A.I. is reshaping the global technology industry.

The deal is a lifeline for Intel. Once an industry leader, the company has struggled to keep up with technology shifts to mobile devices and A.I. Last month, the Trump administration agreed to buy a roughly 10 percent stake in Intel to bolster its shaky financial position.

Nvidia, by contrast, is one of the world’s biggest and most geopolitically significant companies, producing the key chips needed for developing A.I. Jensen Huang, the company’s chief executive, has become an industry superstar and joined President Trump in Britain this week for a state dinner at Windsor Castle.

As part of the deal, Nvidia and Intel said they would collaborate in developing chips for personal computers and data centers. Intel's shares soared more than 25 percent in premarket trading.

“Together, we will expand our ecosystems and lay the foundation for the next era of computing,” Mr. Huang said in a statement.

Nvidia said it would buy about $5 billion of Intel’s common stock, a stake worth about 4 percent of the company. It will pay $23.28 per share, a discount from the company’s closing price on Wednesday.

“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,” Lip-Bu Tan, the chief executive of Intel, said in the statement.