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Nvidia said on Thursday it would invest US$5 billion in Intel, throwing its heft behind the struggling US 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 per cent 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 25 per cent jump in the US manufacturer’s shares.
Intel – once the chip industry’s flag bearer that claimed to put the “silicon” in Silicon Valley – appointed a new CEO, Tan Lip-Bu, in March.
He quickly came under fire from US elected officials, including US 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 US a 10 per cent stake in the company.
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