Nvidia acquires Intel shares worth $5 billion to uplift AI, chip manufacturing

Chip-making giant Nvidia has now fully acquired $5 billion worth of Intel shares in a transaction that was initially announced in September.

Citing a recent filing, Reuters noted that Nvidia purchased over 214.7 million Intel shares at $23.28 each, providing crucial financial support for Intel after years of costly production expansions that took a toll on its finances.

The colossal stake bought by Nvidia holds substantial value for Intel, offering fresh funding to uplift its chip manufacturing and AI development efforts.

This capital injection is expected to reduce financial pressures resulting from extensive factory spending, making Intel more equipped to innovate and compete in the semiconductor market.

U.S. antitrust agencies have approved Nvidia's investment, ensuring regulatory compliance, as confirmed by a notice from the Federal Trade Commission earlier in December.

Nvidia shares rise

Following the announcement of its Intel stake acquisition, Nvidia shares registered a minute decline of 1.3% in premarket trading, while Intel's stock remained stable.

The team-up is believed to further strengthen ties between Nvidia and Intel, particularly in CPU-GPU integration for data centres and personal computers, and as per analysts, Intel may develop a Serpent Lake laptop chip that combines its CPUs with Nvidia's GPUs, further expanding Nvidia's influence beyond traditional Taiwanese suppliers.

The deal enables both companies to enhance their capabilities in the speedily evolving AI chip landscape, setting the groundwork for innovative solutions in the tech industry.