Nvidia gives Intel $5 billion lifeline
Nvidia agreed to invest $5 billion in Intel and said the two will co-develop chips for PCs and data centres, a surprise move to help prop up an ailing archrival that sent Intel shares soaring.Nvidia will buy Intel common stock at $23 per share, the two companies said on Thursday. Intel will use Nvidia’s graphics technology in upcoming PC chips and also provide its processors for data centre products built around Nvidia hardware. The two companies didn’t offer a timeline for when the first parts will go on sale and said the announcement doesn’t affect their individual future plans.
The new funds for Intel come after the US govt agreed in Aug to take a roughly 10% stake in it and President Donald Trump took on the role of pitchman. Japan’s SoftBank Group, which has committed to invest tens of billions into US chipmaking and cloud infrastructure, made a surprise $2-billion investment last month and Intel is also raising cash by selling assets to investors. Its current operations, hit by market share losses, cannot shoulder the burden of intensive spending associated with trying to build leading-edge semiconductors.Intel’s stock surged by as much as 28% after markets opened in New York. On paper, the value of the US govt’s stake has jumped more than 55% to $4.9 billion.The tie-up between the two Santa Clara, California-based rivals underlines how the balance of power in the computer industry has shifted. Intel is getting a financial shot in the arm and access to market-leading technology from a company that it once relegated to a niche role on the industry’s fringes.
