Nvidia plans $5bn investment in Intel
World leading manufacturer of artificial intelligence chips, Nvidia has disclosed plans buy a $5billion (£4billion) stake in rival firm Intel. The Santa Clara, Californiabases tech firm announced the deal on Thursday.
It said the partnership would lead to manufacturing of personal computer and data centre chips, considering the surge in AI demands by companies seeking to power massive data centres.
The deal is forecast as a prospect for Nvidia becominf one of Intel’s biggest shareholders, with a roughly four percent stake in the troubled semiconductor company. Acccording to industry watchers, Intel’s stock surged more than 25 percent on news of the deal, which could boost the once-dominant chipmaker’s shares in Nvidia that rose roughly three percent.
Meanwhile, the company was said to have struggled in recent years to build out more chip capacity. It has fallen far behind rival Nvidia, which has dominated the AI boom by offering chips that are crucial for developing the technology. Nvidia’s market cap has soared past $4 trillion while Intel’s has languished at around $100bn.
The new collaboration represents “a fusion of two worldclass platforms”, Jensen Huang, Nvidia’s CEO, said in a statement. “Together, we will expand our ecosystems and lay the foundation for the next era of computing,” Mr Huang added.
Nvidia is motivated to invest in Intel in order to diversify some production away from other competitors – notably, Taiwan’s TSMC, said Gil Luria, head of technology research at D.A. Davidson.
