Chip alliance reshuffle! Nvidia invests 5 billion USD in Intel to jointly develop AI and PC chips.

U.S. chip giant Nvidia (NASDAQ: NVDA) announced on Thursday that it will make a strategic investment of $5 billion in rival Intel (NASDAQ: INTC), which immediately makes Nvidia one of Intel's major shareholders, holding about 4%. This investment comes on the heels of the U.S. government's stake in Intel, reflecting a chip industry restructuring strategy led by the White House.

Intel's stock price surged by 26% after the announcement, while Nvidia's stock price also rose by about 2%. The market reacted enthusiastically, indicating that investors have high expectations for this collaboration project.

The new CEO is mired in controversy, with the White House intervening to facilitate a three-party consensus.

In March of this year, Intel appointed a new CEO, Lip-Bu Tan, but he quickly faced criticism from political figures, including then-President Donald Trump, due to concerns about potential ties to China raising national security issues. Ultimately, after a closed-door meeting arranged by the White House, Intel agreed to allow the U.S. government to hold a 10% stake in the company as part of a compromise.

Nvidia's participation this time is also seen as part of the White House's strategy, aimed at strengthening the United States' autonomy in the semiconductor field and reducing dependence on Taiwan and China's supply chain.

The collaboration to develop chips while excluding foundry services poses a potential threat to TSMC.

Although Intel and Nvidia will collaborate to develop multiple generations of PC and data center chips, both parties have explicitly excluded Intel's foundry business from the scope of cooperation. This means that Nvidia will not currently have its high-end AI chips manufactured by Intel.

However, such cooperation still poses a potential risk to Taiwan's chip foundry leader TSMC, as TSMC is currently the supplier of Nvidia's main AI processors. If Nvidia deepens its cooperation with Intel in the future, it may have a long-term impact on TSMC's operations.

Collaboratively developing AI data centers and PC chips, aiming at AMD and Broadcom

The products that both parties plan to develop include Intel's customized Central Processing Unit (CPU), which will be integrated with Nvidia's Graphics Processing Unit (GPU) to form a high-speed linked AI server component. This high bandwidth chip connection technology will become a key advantage in the AI training and inference processes.

In addition, Nvidia will also provide exclusive graphics chips for Intel, enhancing the competitiveness of its PC processor products. This move is seen as a significant challenge to AMD, as AMD has rapidly risen in the desktop and laptop markets in recent years.

At the same time, another competitor, Broadcom, although possessing chip interconnection technology and collaborating with tech giants like Google to develop AI chips, has not commented on this transaction.

Nvidia takes action to tackle challenges in the Chinese market, engaging with the American political circle.

Although this collaboration cannot directly resolve Nvidia's predicament in the Chinese market, the political benefits are significant. Due to the escalating tech war between the US and China, Nvidia's H20 chip is subject to export controls, hindering its sales in the Chinese market.

In mid-August, under the mediation of the Trump administration, Nvidia was allowed to obtain export licenses to China on the condition that it delivers 15% of its sales profits to the U.S. government, but Nvidia stated that it has not shipped any H20 chips to China to date.

Nvidia CEO Jensen Huang recently accompanied the U.S. President on a visit to the UK, demonstrating the company's active alignment with the White House's political strategy. Hargreaves Lansdown senior analyst Matt Britzman stated, "This move aligns with U.S. policy direction and may help ease export restrictions on high-end chips to China."

The US government and private enterprises are joining forces, and Intel's capital lineup is growing stronger.

This investment by Nvidia is Intel's third significant capital injection in recent times, following the previous $2 billion investment from Japan's SoftBank and $5.7 billion support from the U.S. government, which have clearly strengthened Intel's capital reserves. CEO Pat Gelsinger has also pledged to adopt a "lean strategy," expanding production capacity only after confirming market demand to avoid resource waste.

The product schedule is undecided, and the AI chip war has entered a new phase.

Although both parties have not disclosed the launch time of the first jointly developed product, it has been clearly stated that the original product roadmap of both parties will continue to be executed. This cooperation does not involve patent licensing and is entirely a matter of commercial product exchange and technical integration, setting a new cooperative model for the industry.

In recent years, Nvidia has been actively expanding its market in PC and data center CPUs, while Intel has been working hard to advance AI server and its own AI chip development. The alliance between the two not only redefines the competitive landscape but may also become a decisive factor in competing for the AI chip market against rivals such as AMD, Broadcom, and TSMC.

This article discusses the major reshuffle in the chip alliance! Nvidia invests 5 billion dollars in Intel, collaborating to develop AI and PC chips, first appearing on Chain News ABMedia.