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.
Intel’s shares soared more than 25 percent in premarket trading. Nvidia’s stock rose about 3 percent.
The partnership between the two American chipmakers comes as China attempts to become less dependent on U.S. chip technology and manufacture more semiconductors domestically. On Thursday, the Chinese technology giant Huawei said it was expanding A.I. chip development, a move that would challenge Nvidia.
As part of the deal, Nvidia and Intel said they would collaborate in developing chips for personal computers and data centers. Intel specializes in chips known as central processing units, that serve as the “brain” of a computer by coordinating different tasks across a machine. Nvidia makes other chips, known as graphics processing units, that are powerful for narrower tasks like crunching massive amounts of data.
The companies said they would develop chips for personal computers and data centers that incorporate both strengths, which could appeal to companies that need huge amounts of computing power for data centers or research.
“Together, we will expand our ecosystems and lay the foundation for the next era of computing,” Mr. Huang said in a statement.
Nvidia, which has a market value of more than $4 trillion, said it would buy about $5 billion of Intel’s common stock, a stake worth about 4 percent of the smaller company. It will pay $23.28 per share, a discount from Intel’s closing price on Wednesday. Based on today’s stock gains, Nvidia has already profited from the deal.
“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.
Adam Satariano is a technology correspondent for The Times, based in London.
The post Nvidia to Buy $5 Billion Stake in Intel, Giving Rival a Lifeline appeared first on New York Times.
