Nvidia invests $5B in Intel to influence foundry capacity and next-generation AI chip design collaboration.

Nvidia's $5 billion Intel stock purchase is already worth $7.58 billion, turning the recently approved bailout of its rival into a shrewd financial play. Nvidia had locked in a purchase price of $23.28 per share for Intel when Nvidia CEO Jensen Huang and Intel CEO Lip-Bu Tan struck a deal in September. The purchase of 214 million shares closed on December 26, according to Intel regulatory filings. Intel shares closed Monday at $36.68, a significant jump from the $23.28 per share price Nvidia negotiated.

The deal had been under scrutiny by the U.S. Federal Trade Commission, which was examining whether Nvidia's potential 4 percent ownership stake could run afoul of antitrust laws. However, the FTC gave the deal a greenlight on December 18, clearing the way for the transaction to proceed.

Under the terms of the deal, Nvidia and Intel will jointly develop "multiple generations" of chips for datacenter and PC in a move to capture share across the entire chip customer base from consumer to hyperscale customers. The two companies will work on connecting their chips via the incredibly fast NVLink, which reaches 1.8 TB/s of bandwidth—900 GB/s in each direction per GPU—about 14x the bandwidth of a PCIe 5.0 x16 slot. In the PC arena, Intel will build Nvidia-custom x86 CPUs that Nvidia will integrate into its AI infrastructure platforms and offer to the market. Intel will also be able to build x86 systems-on-chips that integrate Nvidia RTX GPU chiplets, creating new x86 RTX chips that will power PCs with integrated CPUs and GPUs.

The agreement is reminiscent of a 2021 deal that ran afoul of regulators when Nvidia attempted to buy UK-based chipmaker Arm outright for $40 billion. The FTC sued, and Nvidia abandoned the deal two months after the lawsuit was filed. Former FTC chairman Lina Khan noted at the time that "the proposed merger would have given one of the largest chip companies control over its rivals' designs for competing chips" and that "the combined firm would have had the means and incentive to stifle next-generation technologies, including those used to run datacenters and driver-assistance systems in cars."

Nvidia maintains a long-standing relationship with both Arm and Arm-based SoC designers. Prior to its 72-core Grace CPUs, Nvidia worked with Arm on its Tegra family of chips, which power consoles like Nintendo Switch. Nvidia has also extended similar support for its NVLink technology to Qualcomm and Fujitsu.