Financial Associated Press, September 18 (Editor Xia Junxiong)On Thursday (September 18) local time, Nvidia announced that it would invest US $5 billion in Intel and jointly develop PC and data center chips with it.

Boosted by this news, Intel's stock price rose by more than 30% before the market opened, and Nvidia also rose by more than 3%.

Nvidia announces that it will invest US $5 billion in Intel (data map)

Under the agreement, NVIDIA will buy ordinary Intel shares at $23.28 per share, a discount of about 6.5% from Intel¡¯s closing price on Wednesday ($24.9), but higher than the price the U.S. government purchased last month at $20.47 per share.

In August this year, the U.S. government reached an agreement with Intel to acquire a 9.9% stake in Intel for about $8.9 billion, becoming one of its largest shareholders. Part of this investment comes from subsidies provided by the U.S. Chip Act.

In the future, Intel will incorporate NVIDIA¡¯s graphics technology into the upcoming PC chips and provide processors for NVIDIA hardware-based data center products. The two companies did not disclose the time when the first products were released and stressed that existing product planning was not affected.

After the deal is completed, Nvidia is expected to hold more than 4% of Intel's shares, becoming one of its largest shareholders.

In a statement, Nvidia CEO Huang Yi said: ¡°This historic partnership will closely combine Nvidia¡¯s AI with accelerated computing technology, Intel¡¯s CPU and the huge x86 ecosystem.

While chips based on Arm technology are swallowing market share in the data center and PC fields, Intel¡¯s x86 architecture still holds the majority share.

Now, NVIDIA is also developing self-developed CPUs based on the Arm architecture, and said this plan will not change.

It is worth noting that the collaboration does not involve the manufacture of Intel chips for NVIDIA.Most analysts believe that in order to survive, Intel will have to win orders from large customers such as NVIDIA, Apple, Qualcomm or Booth in the future.

As the Silicon Valley once a benchmark enterprise, Intel is deep in trouble, and its chip manufacturing business has sustained losses in recent years, dragging down the company's operations.

At the same time, the explosion of the AI craze has exacerbated the plight caused by the loss of its leadership position in manufacturing processes.

In 2022, Intel¡¯s revenue was still twice that of Nvidia, however, now Wall Street expects Nvidia¡¯s sales to reach $200 billion this year, and next year¡¯s single-quarter revenue may exceed that of Intel for the whole year.

It is worth mentioning that the scale of Nvidia's data center business even exceeds the overall sales of any other chip company.