U.S. artificial intelligence (AI) representative corporations Nvidia announced on the 18th (local time) that it will invest $5 billion (about 6.932 trillion won) in Intel, which has fallen into management difficulties, and embark on joint development of chips for PCs and data centers.
According to Reuters that day, Nvidia agreed to purchase Intel common stock at $23.28 per share. That is lower than the prior trading day's closing price ($24.90) but higher than the $20.47 per share paid last month when the U.S. government acquired a 10% equity stake in Intel. With this investment, Nvidia is expected to secure more than a 4% equity stake in Intel and rise to a major shareholder.
Huang Jen-hsun, Nvidia chief executive officer (CEO), said, "This historic collaboration tightly combines Nvidia's AI and accelerated computing technology with Intel's CPUs and vast x86 ecosystem, merging two world-class platforms into one," and added, "Together, we will expand the ecosystem and lay the foundation for the next era of computing."
This investment decision is expected to ripple through Intel's competitors as well. Taiwan's TSMC, currently Nvidia's key manufacturing partner, may see little impact in the short term, but in the long run it could lose its biggest customer to Intel.
AMD, which has competed with Intel in the data center chip market, is also seen as inevitably losing ground as Intel rises with Nvidia's backing.
However, the cooperation does not include a foundry (semiconductor contract manufacturing) deal for Intel to produce Nvidia's chips. The market is paying attention to the absence of a foundry contract, and the prevailing view is that for Intel to successfully anchor its foundry business, it must secure large customers such as Nvidia, Apple, and Qualcomm.
Intel, once the world's top semiconductor corporations, has struggled as it fell behind the curve. Despite years of efforts to revive the business, it has failed to produce clear results, and Reuters reported that Nvidia's investment could provide a new breakthrough.
Recently, Intel received $5.7 billion in support from the U.S. government and attracted a $2 billion investment from Japan's SoftBank.