The artificial intelligence (AI) leader Nvidia (NVDA 0.12%) announced Thursday that it will invest $5 billion in Intel (INTC 2.04%) as part of a sweeping collaboration to build new data center and PC products. The two companies plan to combine Nvidia's accelerated computing stack and NVLink interconnect with Intel's x86 CPUs across multiple generations.
The implications are significant -- especially for Intel; the deal represents a much-needed endorsement at a critical moment in its turnaround. For Nvidia, the partnership offers ways to expand its platform beyond GPUs and into tighter integration with the dominant CPU architecture.
Here are four things investors should know about this strategic partnership.
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1. Infusing both capital and strategy
Nvidia will purchase $5 billion of Intel stock at $23.28 per share, pending regulatory approvals. Alongside the equity investment, Intel will design custom x86 CPUs for Nvidia's AI platforms and develop x86 system-on-chips for PCs that integrate Nvidia RTX GPU chiplets via NVLink.
Jensen Huang, Nvidia's founder and CEO, described the collaboration as "a fusion of two world-class platforms." Intel CEO Lip-Bu Tan characterized it as validation of Intel's technology roadmap and its ability to serve as a manufacturing partner.
The strategic message is clear: Nvidia wants closer access to the vast x86 ecosystem, and Intel needs relevance in the age of AI.
2. Data center implications
The most immediate opportunity lies in the data center. Training and inference workloads depend on how quickly CPUs can feed data to GPUs. Nvidia says Intel will build NVIDIA-custom x86 CPUs designed to slot into its AI platforms.
If successful, these CPUs could improve bandwidth and reduce latency, leading to lower total cost of ownership for customers. That matters at a time when data-center operators are racing to deploy more efficient AI clusters.
3. Intel's business is still under pressure
For Intel, the partnership also provides something less tangible but equally important: credibility. The company has endured years of declining margins and lost share in both data centers and PCs. Its manufacturing delays and product missteps left room for competitors like AMD and Arm Holdings-based chip designers to grow.
Financially, Intel is still struggling. In its second quarter of 2025, revenue was flat year over year at $12.9 billion. Additionally, management has guided for breakeven non-GAAP earnings in Q3 as it works to lower operating expenses.
Against this backdrop, Nvidia's endorsement shows that Intel can play a key role in the AI era after all. Intel still has scale, global manufacturing, and an extensive customer base. If Intel can align these strengths with Nvidia's platform, it could mark an inflection point in its turnaround.
4. Implications for Intel investors
Ultimately, Intel investors should applaud the collaboration. It's definitely good news. With this deal (assuming it's approved), Nvidia gains new ways to scale its platform across both data centers and PCs, and Intel gains a much-needed partner and a clearer roadmap to relevance in the AI era.
The challenge, of course, will be in execution. The chipmaker will need to show that design wins can translate into profitable volume.
Fortunately, expectations are low. Even after the stock's jump on Thursday, shares still trade like a deep value stock by some metrics. Intel's price-to-book value is just 1.4. Its price-to-sales ratio is only 2.5. These figures compare to price-to-book and price-to-sales ratios of 44 and 27, respectively, for Nvidia, as of this writing.
With shares down about 36% over the last five years, Intel has largely missed out on all major tailwinds for chip companies in recent years. Nvidia's involvement introduces more than capital and a product roadmap, but a culture of innovation. This is likely encouraging not only for investors but also for employees and management.
If Intel can successfully execute and scale on these product plans, the company could begin reporting substantial profits again, and the stock could rise even more. But there's no guarantee this happens, and it's going to require patience.
