Intels

The White House denies any involvement with the deal despite Nvidia’s CEO meeting US President Donald Trump only a day before.

Nvidia says it will invest $5bn into Intel, throwing its heft behind the struggling US chip company, but has stopped short of giving Intel a crucial manufacturing deal.

Nvidia, which is based in Santa Clara, California, announced the investment on Thursday.

The pact, which also includes a plan for Intel and Nvidia to jointly develop personal computer and data centre chips, represents a potential risk to Taiwan’s TSMC. TSMC currently manufactures Nvidia’s flagship processors, a business that the world’s most valuable company could one day extend to Intel. AMD, which competes with Intel for supplying chips to data centres, also stands to lose because of Nvidia’s backing of Intel.

Nvidia, whose must-have chips are powering a global artificial intelligence boom, said in a statement it will pay $23.28 per share for Intel common stock, a price slightly below the $24.90 at which Intel shares closed on Wednesday.

However, that is higher than the $20.47 price per share that the United States government paid for a 10 percent stake it took in Intel last month, an extraordinary development.

The White House has denied any involvement in the deal, which comes only a day after US President Donald Trump met Nvidia CEO Jensen Huang on Wednesday.

New opening

Nvidia’s latest investment will make it one of Intel’s largest shareholders, likely owning 4 percent or more 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 at the famed US manufacturer failed to pay off.

Intel – once the chip industry’s flagbearer that claimed to put the “silicon” in Silicon Valley – appointed a new CEO, Lip-Bu Tan, in March. Tan has promised to make Intel’s operation lean and build factory capacity only when there’s demand to match it.

Crucially, the deal will not involve Intel’s contract manufacturing business, known as a “foundry” in the chip industry, making chips for Nvidia. Most analysts believe that for Intel’s foundry to survive, it would need to eventually win a large customer such as Nvidia, Apple, Qualcomm or Broadcom.

But the deal adds to a growing reserve of capital that Intel has accumulated weeks after it announced a $2bn investment from Softbank and received $5.7bn from the US government.

David Zinsner, Intel’s chief financial officer, told investors at a Deutsche Bank conference last month that the company was in a “good cash position” and would not require much more capital until it saw significant demand for 14A, a next-generation manufacturing process that it expects to invest heavily in building.

Under the deal announced Thursday, Intel is planning to design custom data-centre central processors that Nvidia will package with its AI chips, known as GPUs. A proprietary Nvidia technology will let the Intel and Nvidia chips communicate at higher speeds than before.

Those speedy links are a key differentiator in the AI market because many chips must be strung together to act as one to chew through massive amounts of data.

At present, Nvidia’s best-selling AI servers with those speedy links are only available using Nvidia’s own chips, but the deal would now put Intel on equal footing, giving it a chance to make money off each Nvidia server.

On Wall Street, Nvidia’s stock is trending upwards. As of 12pm in New York (16:00 GMT), it is up more than 3.4 percent from the market open. Intel stock is surging up more than 29 percent for the day.

By&nbspAP with Eleanor Butler

Published on
08/08/2025 – 9:20 GMT+2

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Intel shares slumped on Thursday after President Donald Trump said in a social media post that the chipmaker’s CEO needed to resign.

“The CEO of Intel is highly conflicted and must resign, immediately,” Trump posted on Truth Social. “There is no other solution to this problem. Thank you for your attention to this problem!”

Trump made the post after Senator Tom Cotton sent a letter to Intel Chairman Frank Yeary, expressing concern over CEO Lip-Bu Tan’s investments and ties to semiconductor firms that are reportedly linked to the Chinese Communist Party and the People’s Liberation Army. Cotton asked the board whether Tan had divested his interests in these companies to eliminate any conflicts of interest.

It’s not immediately clear if Tan, who took over as Intel’s CEO in March, has done so.

In a statement, Intel said it was “deeply committed to advancing US national and economic security interests”. The firm said it was making “significant investments aligned with the President’s America First agenda”.

Cotton’s allegations

“In March 2025, Intel appointed Lip-Bu Tan as its new CEO,” Cotton wrote in the letter. “Mr. Tan reportedly controls dozens of Chinese companies and has a stake in hundreds of Chinese advanced-manufacturing and chip firms. At least eight of these companies reportedly have ties to the Chinese People’s Liberation Army.”

Cotton specifically called out Tan’s recent leadership of Cadence Design Systems in the letter. According to the US Department of Justice, Cadence, agreed in July to plead guilty to resolve charges that it violated export controls rules to sell hardware and software to China’s National University of Defense Technology, which is linked to the Chinese military.

Tan was the CEO of Cadence when the company violated the rules between 2015 and 2021.

The US Department of Commerce’s Bureau of Industry and Security also fined Cadence $95 million for the same breaches, saying Cadence admitted that “employees of its Chinese subsidiary knowingly transferred sensitive US technology to entities that develop supercomputers in support of China’s military modernisation and nuclear weapons programs.”

Cadence did not immediately respond to AP requests.

The digital race

Tan previously launched the venture capital firm Walden International in 1987 to focus on funding tech start-ups, including chip makers.

China’s state media has described Tan as “actively” devoted to Chinese and Asian markets, having invested not only in the Taiwan Semiconductor Manufacturing Company, but also China’s state-owned enterprise SMIC, which seeks to advance China’s chipmaking capabilities.

The demands made by Trump and Cotton come as economic and political rivalries between the US and China increasingly focus on the competition over chips, AI and other digital technologies that experts say will shape future economies and military conflicts.

Cotton, the chairman of the Senate Intelligence Committee, has raised concerns that Chinese spies could be working at tech companies and defence contractors, using their positions to steal secrets or plant digital backdoors that give China access to classified systems and networks.

On Thursday the Arkansas Republican wrote to the Department of Defense, urging Defense Secretary Pete Hegseth to ban all non-US citizens from jobs allowing them to access DoD networks. He has also demanded an investigation into Chinese citizens working for defence contractors.

“The US government recognises that China’s cyber capabilities pose one of the most aggressive and dangerous threats to the United States, as evidenced by infiltration of our critical infrastructure, telecommunications networks, and supply chains,” Cotton wrote in an earlier letter, calling on the Pentagon to conduct the investigation.

National security officials have linked China’s government to hacking campaigns targeting prominent Americans and critical US systems.

“US companies who receive government grants should be responsible stewards of taxpayer dollars and adhere to strict security regulations,” Cotton wrote on the social platform X.

Playing catch-up

Intel had been a beneficiary of the Biden administration’s CHIPS Act, receiving more than $8 billion (€6.9bn) in federal funding to build computer chip plants around the country.

Shares of the California company slid 3.5%, while markets, particularly the tech-heavy Nasdaq, gained ground.

Founded in 1968 at the start of the PC revolution, Intel missed the technological shift to mobile computing triggered by Apple’s 2007 release of the iPhone, and it has lagged behind more nimble chipmakers. Intel’s troubles have been magnified since the advent of artificial intelligence — a booming field where the chips made by once-smaller rival Nvidia have become tech’s hottest commodity.

Intel is shedding thousands of workers and cutting expenses, including some domestic semiconductor manufacturing capabilities, as Tan tries to revive the fortunes of the struggling chipmaker.