Nvidia spends $5B on Intel bailout, instantly gets $2.5B richer

Steven

Nvidia spends $5B on Intel bailout, instantly gets $2.5B richer

Summary

Nvidia bought 214 million Intel shares at about $23.28 a share under a deal struck in September. The purchase closed on 26 December and, with Intel trading at roughly $36.68 on Monday, the holding is now worth around $7.58 billion—about $2.58 billion more than the $5 billion Nvidia paid.

The agreement goes beyond a simple investment: Nvidia and Intel will jointly develop multiple generations of chips for datacentre and PC markets. Plans include tighter integration via Nvidia’s NVLink interconnect (very high bandwidth), Intel building Nvidia-custom x86 CPUs for Nvidia’s AI platforms, and Intel producing x86 SoCs that incorporate Nvidia RTX GPU chiplets.

Key Points

  • Nvidia purchased 214 million Intel shares at ~US$23.28 per share; the stake closed at ~US$7.58bn, producing an immediate paper gain of ~US$2.58bn.
  • The transaction was reviewed by the US FTC, which gave early termination/clearance on 18 December, allowing the purchase to complete on 26 December.
  • Deal terms include joint development of datacentre and PC chips, plus use of NVLink to connect chips at very high bandwidth.
  • Intel will produce Nvidia-custom x86 CPUs and x86 SoCs integrating RTX GPU chiplets for PC and AI infrastructure use cases.
  • The collaboration echoes past regulatory concerns (e.g. Nvidia’s abandoned Arm takeover) about large chipmakers gaining control over competitors’ designs.

Content summary

The article explains how Nvidia’s $5bn equity purchase in Intel immediately appreciated thanks to a post-deal share price rise, turning a bailout-style investment into a profitable strategic stake. It summarises the technical and commercial aspects of the cooperation—NVLink integration, custom x86 CPUs for Nvidia, and Intel-built x86 RTX SoCs—and notes the regulatory backdrop, including FTC scrutiny and historical precedent with the blocked Arm deal.

Context and relevance

This matters because it blends finance, competition and technology strategy. Nvidia isn’t just taking a passive stake: the deal formalises chip co‑development that could reshape datacentre and PC component design, accelerate tighter CPU–GPU integration, and shift competitive dynamics across hyperscalers, PC OEMs and AI infrastructure vendors. Regulators will be watching whether this degree of interdependence affects competition the way the proposed Arm takeover once threatened to do.

Why should I read this?

Quick version: Nvidia paid US$5bn, woke up with US$2.5bn in its pocket and a roadmap to glue Intel and Nvidia tech together. If you follow AI hardware, datacentre business models, or who gets to control next‑generation PC and server tech, this is the bit of drama that changes market maps — and it happened fast.

Author style

Punchy: this isn’t just a tidy trade — it’s strategic positioning. Read the detail if you want to understand how the two firms will split labour (Intel makes x86 bits, Nvidia supplies GPU IP and NVLink) and why that could matter for vendors, cloud providers and regulators.

Source

Source: https://go.theregister.com/feed/www.theregister.com/2025/12/29/nvidia_intel_5_billion/