Nvidia investing $5 billion in Intel, weeks after U.S. government takes 10% stake.

Sept 2025 : At a news conference on Thursday, Nvidia CEO Jensen Huang said that his company will take a $5 billion stake in Intel, boosting a struggling rival at the heart of the Trump administration’s domestic manufacturing ambitions, as it vies for more favourable trade policies in China.

Nvidia’s cash infusion comes weeks after President Donald Trump brokered a controversial deal that turned the U.S. government into Intel’s largest shareholder, a level of intervention in private enterprise rarely seen outside times of war or economic crisis. However, Jensen Huang has clarified that the Trump administration had “no involvement” in the new partnership. Still, he noted, Commerce Secretary Howard Lutnick “was very excited and very supportive of seeing American technology companies working together”.

Nvidia has made headway in its efforts to bring administration officials around to its view that lifting restrictions on U.S. chip sales abroad would buoy the United States in the AI race against China. Such a policy shift could bring in billions of dollars in new revenue each year for Nvidia.

David Sacks, the White House AI czar, on Thursday has called for relaxing U.S. export controls that restrict Nvidia’s sale of AI chips to China, writing on X that recent developments reflected that China was “not desperate for our chips” and that Chinese tech giant Huawei was narrowing the gap with Nvidia. “It’s time for Washington to update its assumptions with regard to export controls. American chip companies must be allowed to sell the American technology stack abroad, albeit with security requirements, else we forfeit the AI race to China”.

Some analysts viewed Nvidia’s tie-up with its lagging rival as the latest facet of a successful charm campaign by the world’s most valuable company with the White House. The Intel deal “will obviously do a lot to help Nvidia get in the Trump administration’s good graces”, said Ryan Fedasiuk, a former Biden administration China adviser who is now a fellow with the conservative American Enterprise Institute. “Five billion dollars is a steep price to pay for optics alone”, he said, “but it certainly doesn’t hurt that the investment is being made in a company partially owned by the U.S. government”.

The companies, both based in Santa Clara, California, will develop data center and PC products together, without Nvidia committing to using Intel’s manufacturing services. Nvidia is a “fabless” chipmaker, which means it designs but doesn’t make its chips, hiring a third-party company to do so. Intel operates its own factories but has been struggling to land customers, because its technology lags those of Taiwanese and Korean rivals. “We’ve always evaluated Intel’s foundry technology, and we’re going to continue to do that”, Huang said Thursday when asked whether Nvidia would become an Intel foundry customer.

Stacy Rasgon, a senior analyst at Bernstein, said a cash investment was probably the most support Nvidia could give Intel at this point, with the latter’s foundry capabilities uncertain. “I don’t think there’s any way that they can give them a manufacturing commitment. There’s nothing to commit to yet”.

Intel’s long-term health has been a concern for Republicans and Democrats; it’s the nation’s only advanced manufacturer of chips left standing, with the technology crucial for both the economy and national defense. During the Biden administration, it had been the largest recipient of Chips Act grants to support its domestic manufacturing, with an award of up to $8.5 billion.

Trump had criticised the grants as wasteful and in early August called for the resignation of Intel CEO Lip-Bu Tan. Later that month, the two struck a highly unusual arrangement for the U.S. government to become the company’s largest shareholder, with the outstanding Chips grants converted into an equity stake. Trump had expressed optimism that the company’s share price would go up, giving the government a return on its investment. “I will also help those companies that make such lucrative deals with the United States. I love seeing their stock price go up, making the USA RICHER, AND RICHER”, he wrote on Truth Social.

Intel closed Thursday at $30.57 a share, up nearly 23% and well past the $20.47 a share that the U.S. government agreed to pay for its 10% stake. Nvidia said it will purchase the stock at $23.28 apiece and that the deal is subject to regulatory approval. Nvidia added nearly 3.5%, ending the trading day at $176.24.

While Intel had reigned as the world’s most advanced chipmaker for two decades, it began slipping in recent years because of several missteps, including missing out on being a supplier for the iPhone. Intel ran a net loss of $2.9 billion in the most recent quarter, as executives touted their efforts to reduce costs by slashing layers of middle management.

Nvidia, on the other hand, has rocketed up from relative obscurity to a market cap of $4.1 trillion on the back of its AI chips, which are fueling the artificial intelligence boom. Its business has become a geopolitical focus, with the Biden administration’s efforts to slow China’s AI advances hinging largely on increasingly stringent export controls blocking Nvidia from selling its wares to the country.

Trump had at first doubled down on Biden’s export controls on Nvidia, then reversed course after intensive lobbying by the company, and on the recommendation of officials such as Sacks who argued that the U.S. risked ceding the global marketplace to China. The Trump administration’s commentary about China needing Nvidia chips angered Beijing, which launched an antitrust investigation into the company.

Tan, the Intel chief, said at the news conference on Thursday that he and Huang have known each other for decades and that the investment would be a game changer for his company. When combined with the U.S. government’s recent investment, he said, “this has been the golden few weeks for Intel after years of pain and frustration for investors”.

Team Maverick