Nvidia said it would invest $5 billion in Intel, throwing its heft behind the struggling U.S. chipmaker just weeks after the White House engineered an extraordinary deal for the federal government to take a massive stake in the company.
The stake will instantly make Nvidia one of Intel's largest shareholders, giving it roughly 4% of the company after new shares are issued to complete the deal. Nvidia's support represents a new opening for Intel after years of turnaround efforts failed to pay off, and it triggered a jump in the U.S. manufacturer's shares.
The company – once the chip industry's flag bearer that claimed to put the "silicon" in Silicon Valley – appointed a new CEO, Lip-Bu Tan, in March. He quickly came under fire from U.S. elected officials, including President Donald Trump, who called for him to resign due to concerns about his connections with China. That led to a swiftly arranged meeting in Washington that ended with Intel's unusual arrangement to give the U.S. a 10% stake in the company.
The new pact includes a plan for Intel and Nvidia to jointly develop PC and data center chips, but crucially will not involve Intel's contract manufacturing business, known as a "foundry" in the chip industry, making chips for Nvidia.
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