Chipmaker Nvidia to invest $5bn in rival Intel
Intel's stock surged more than 25% on news of the deal, which could boost the once-dominant chipmaker. Shares in Nvidia rose roughly 3%.
It will make Nvidia one of of Intel's biggest shareholders, with a roughly 4% stake in the troubled semiconductor company.
The deal, announced on Thursday, will involve a partnership between the two American companies to make personal computer and data centre chips, as demand for AI continues to surge and companies seek to power massive data centres.
Nvidia, the leading manufacturer of artificial intelligence chips, said it will buy a $5bn (£4bn) stake in Intel - a lifeline for its struggling rival on the heels of a separate investment from the US government.
Intel has 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 world-class 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. The chip giant is "now in the mode of investing in other companies in the AI ecosystem in order to keep the momentum for the emerging technology," Mr Luria said.
... continue reading