Nvidia’s $5B Intel Investment Shakes Chip Sector, Arm Holdings Shares Dip

Arm Holdings (ARM) shares slid 4% intraday as Nvidia (NVDA) unveiled a $5 billion strategic investment in Intel (INTC), triggering sector-wide repositioning. The move strengthens Intel's position in x86 architecture - Arm's primary competitor - while underscoring Nvidia's growing dominance as the AI chip kingmaker.

Nvidia maintains complex ties with Arm, holding $150 million in shares and utilizing its architecture for Grace CPU designs. This latest maneuver suggests a deliberate diversification beyond Arm-based solutions, particularly for data center and PC products. Market reactions were starkly divergent: Intel surged 26% while Arm retreated from early 7.4% losses.

The semiconductor landscape grows increasingly fluid as Arm evolves from licensing pure-play to chip designer. Nvidia's expanding portfolio - now including strategic stakes in both Arm and Intel - positions it as the sector's central power broker, capable of reshaping competitive dynamics through capital allocation.