On September 18, according to NVIDIA, NVIDIA said it would invest $5 billion in Intel and announced that the two sides had reached a cooperation agreement to plan joint development on AI infrastructure and personal computing products.

Under the cooperation agreement, Intel will customize x86 CPUs for NVIDIA in the data center area and integrate them into the AI infrastructure platform by NVIDIA; in the personal computing field, Intel will produce and supply x86 system-level chips (SOCs) that integrate NVIDIA RTX GPU chips.

Boosted by this news, Intel's stock market jumped in the front line, rising more than 30% at a time; NVIDIA's stock market rose more than 2%.

Nvidia becomes an Intel shareholder.

Electricity down before AMD.

Under the agreement, NVIDIA will buy ordinary Intel shares at $23.28 per share, a discount of about 6.5% compared to 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 purchase Intel¡¯s shares at about $9.89 million, becoming one of its largest shareholders. This investment is partly from subsidies provided by the U.S. Chip Act.

It is worth noting that according to Intel's latest market value calculation, after the transaction is completed, Nvidia is expected to hold more than 4% of Intel's shares and will become one of Intel's important shareholders.

"This historic collaboration closely integrates Nvidia's AI and accelerated compute stack with Intel's CPUs and massive x86 ecosystem-the convergence of two world-class platforms. Together, we will expand our ecosystem and lay the foundation for the next era of computing," Nvidia CEO Jensen Huang said in a press release.

Chen Liwu, CEO of Intel, said in a statement: "We thank Huang Renxun and the Nvidia team for their confidence in investment, and look forward to the next cooperation to continue to innovate for customers. Intel's x86 architecture has been the cornerstone of modern computing for decades-we are continuously innovating around the full line of products to support all kinds of workloads for the future."

The investment is still pending regulatory approval. According to the information disclosed by the two sides, it does not include the manufacture of NVIDIA chips with Intel¡¯s factory. Yuan Yong and Chen will hold a press conference on the deal at 1 p.m. Eastern U.S. time.

It is noteworthy that White House economic adviser Hasett said in an interview with the media that he was not aware of any news related to Nvidia and Intel¡¯s cooperation talks.

Affected by this, AMD's stock price plunged in pre-market trading in the U.S. stock market, once falling more than 5%. Some analysts pointed out that the chip combination of Nvidia and Intel may pose a major competitive challenge to AMD, which is developing its own AI server.

In addition, the short-line jump before the Taiwan Stock Exchange, once a large drop of more than 2%. the above transaction may pose a potential risk to the Taiwan Stock Exchange's chip manufacturing business.

U.S. government takes shares in advance

Analysts have pointed out that NVIDIA¡¯s joining would bring new opportunities for Intel, which has been trying to reverse the situation for years, but ultimately failed. Most analysts believe that if Intel¡¯s plant wants to survive, it will eventually need to win big customers such as NVIDIA, Apple, Qualcomm or Botox.

It is worth mentioning that Intel has previously received approximately 10% of the U.S. government¡¯s holding support and a $2 billion strategic investment by the Japanese SoftBank Group.

According to a statement issued by Intel at the time, the U.S. government's acquisition was funded by $5.7 billion in subsidies previously awarded to Intel under the Chips and Science Act but not yet paid, as well as another $3.2 billion in government-funded project funding.

After the deal was completed, the U.S. government surpassed Belgrade and became Intel¡¯s largest shareholder.

It is that the U.S. government¡¯s investment in Intel is a passive holding and does not enjoy board seats, governance rights and information rights.The government also agreed, with very few exceptions, to agree with the company¡¯s board on matters that require shareholder approval.

The US media commented that this was another direct intervention by U.S. President Trump in key industries.U.S. industrial policy or opened a big shift from ¡°subsidies¡± to ¡°holding stocks.¡±

Critics argue that the Trump administration¡¯s widespread interference in business affairs is creating new corporate risk categories.

Regarding this investment, Trump said on social platforms that the United States acquired these shares without paying any fees, which are currently worth about $11 billion. This is a good deal for both the US and Intel.

In response to a reporter¡¯s question at the White House, Trump then said that Intel would give about 10 percent of its shares to the U.S. government ¡°was a good thing for the company¡± and that he ¡°will make tens of billions of dollars for the U.S. at once¡± and he ¡°would do it again if there were a chance later.¡±

"Wrong step by step" Intel

Intel has been the world's largest chip manufacturer, as a traditional semiconductor giant, Intel has lost GPU, artificial intelligence and other waves of times over the years, gradually lagging behind rivals such as NVIDIA and AMD in the competition.

In 2000, Intel¡¯s market value was $277 billion, ranked sixth in the world, 60 times that of NVIDIA. Looking back over the past two decades, Intel has repeatedly missed the opportunity at a crucial historical crossroads:

In 2005, then-CEO Paul Otellini proposed to acquire the humble Nvidia for US $2 billion, but the proposal was flatly rejected by the board of directors.

In 2006, Jobs handed in an iphone chip order, but Otellini refused because "Jobs was unwilling to pay an extra dollar", causing Intel to miss a great company and the rising iphone era.

In 2018, then-CEO Robert Swan misjudged the pace of the development of generated AI, thinking that generated AI would not mature in the short term, and he rejected the valuable opportunity to buy a 15% stake in OpenAI for $100 million.

In its latest second quarter report, Intel $12.9 billion in revenue, a slight increase compared to the same period last year ($12.8 billion), slightly above analysts' expectations. But the quarter's net loss was $2.9 billion, which included $1.9 billion in restructuring costs, $8 billion in asset depreciation and $200 million in one-off fees, and resulted in $0.67 per share loss (GAAP) and $0.10 per share non-GAAP loss. It's worth mentioning that this was the sixth consecutive quarter loss, recording the longest consecutive loss in 35 years.

Intel was eliminated by the Dow Jones Industrial Average in November last year and Nvidia replaced it. Intel's stock has fallen 60% in the last year, while Nvidia's shares have surged 171%.

As of the announcement, Intel¡¯s share price increased by 25.24%, $31.185 per share, with a market value of approximately $13.58 billion; NVIDIA¡¯s share price increased by 2.28%, $174.175 per share, with a market value of approximately $4.24 trillion.

Nvidia and Intel shares rise.

Edited | | |Jin Mingyu Yi Qijiang

The school is named Chen.

Image source: Visual China

Daily economic news is synthesized from Securities Times, Brokerage China, and Financial Associated Press