NVIDIA Invests $5B in Intel as Trump Boosts U.S. Chip Strategy

NVIDIA is set to invest $5 billion in Intel, a move that will make the AI chip leader one of the struggling semiconductor giant’s largest shareholders. The deal, which gives NVIDIA ownership of nearly 4% of Intel, was announced shortly after the U.S. government confirmed its own plans to take a 10% stake in Intel.

The announcement follows heightened attention from the Trump administration on the semiconductor sector. In late August, Washington described its investment in Intel as a “historic” step to strengthen U.S. leadership in chip manufacturing and reduce reliance on foreign supply chains. President Donald Trump had previously targeted Intel with criticism, questioning the company’s leadership and its ability to keep pace with rivals, while emphasizing the importance of securing domestic chip production against growing competition from Asia.

The collaboration between NVIDIA and Intel comes at a time of unprecedented demand for artificial intelligence processors and data center capacity. As part of the agreement, the two companies will jointly develop chips for both data centers and personal computers, with the aim of scaling production to meet global demand.

Market reaction was immediate. Intel’s stock surged more than 25% on the news, while NVIDIA’s shares climbed nearly 3%. Intel has struggled in recent years to expand its capacity and recapture market leadership, its market capitalization stagnating at around $100 billion. NVIDIA, by contrast, has soared to over $4 trillion in value on the back of its dominance in AI processors.

Intel’s position has weakened steadily since its central role in powering the personal computer era. Over the last two decades, it has missed multiple technology shifts, most recently the surge in AI, where NVIDIA’s GPUs have become indispensable for machine learning and large-scale inference. The new partnership highlights both Intel’s need for external support and NVIDIA’s interest in diversifying its ecosystem beyond reliance on Taiwan’s TSMC for chip production.

Rising Geopolitical Pressure

The move also comes against a backdrop of rising geopolitical pressure. NVIDIA has faced sales headwinds in China following reports that Beijing has urged its largest technology firms to curtail purchases of the company’s advanced AI processors. At the same time, U.S. policymakers have called for stronger domestic semiconductor capacity to reduce national security risks tied to overseas manufacturing.

Industry analysts note that NVIDIA’s stake does not extend to Intel’s contract manufacturing division, which produces chips for other firms, limiting the direct impact on that part of the business. Even so, the transaction is expected to ripple across the industry, intensifying competition for AMD and TSMC while accelerating U.S. efforts to build a more resilient supply chain.

For Intel, the combined investments from both Washington and NVIDIA provide capital and market confidence as it seeks to rebuild its relevance in an era defined by artificial intelligence. For NVIDIA, the deal strengthens its strategic position in the U.S. semiconductor ecosystem, signaling a new phase where collaboration, investment, and government backing are shaping the balance of power in global chipmaking.