Intel shares surge 30% after Nvidia takes $5B stake in chip firm

ISTANBUL

US chip firm Intel's shares climbed around 30% in pre-market trading on Thursday, after Nvidia announced a $5 billion investment in Intel as part of an agreement with the chipmaker to jointly develop PC and data center devices, which the US government invested in last month.

Nvidia said in a press release Thursday that it is investing its stake at a price of $23.28 per share.

Intel's shares were up to around $32 in pre-market trading as of 1130GMT following the news.

Nvidia said that Intel will design, and manufacture custom data center and client central processing units (CPUs) with Nvidia's NVLink system.

"The companies will focus on seamlessly connecting NVIDIA and Intel architectures using NVIDIA NVLink — integrating the strengths of NVIDIA’s AI and accelerated computing with Intel’s leading CPU technologies and x86 ecosystem to deliver cutting-edge solutions for customers," Nvidia said.

For data centers, Intel will build NVIDIA-custom x86 CPUs that NVIDIA will integrate into its AI infrastructure platforms and offer to the market.

“This historic collaboration tightly couples NVIDIA’s AI and accelerated computing stack with Intel’s CPUs and the vast x86 ecosystem -- a fusion of two world-class platforms. Together, we will expand our ecosystems and lay the foundation for the next era of computing,” said Nvidia CEO Jensen Huang.

Premarket trading saw a 3.4% increase in Nvidia's shares, which is now negotiating an agreement with China to sell less-advanced processors there.

Following a deal in August for the US government to invest 10% in the chipmaker, Intel shares, which had fallen to their lowest point in over a decade earlier this year, have recovered with fresh backing from the Trump administration.

As of Thursday's trading, Intel's stock had increased 11% from the beginning of July.