Intel Spikes 23% on $5 Billion Nvidia Deal for AI Hardware Development

Intel shares surged 23% in early trading after Nvidia announced a $5 billion investment and collaboration to develop custom AI chips for PCs and data centers. The deal, framed by Nvidia CEO Jensen Huang as a fusion of "two world-class platforms," pairs Nvidia's accelerated computing with Intel's x86 architecture.

The partnership aims to optimize Intel's CPUs for Nvidia's AI platforms, addressing longstanding CPU-GPU communication bottlenecks. For consumer devices, Intel will integrate Nvidia's RTX graphics technology into system-on-chip designs. The MOVE comes amid growing AI chip demand and follows China's reported ban on Nvidia AI chip purchases by local tech firms.

Nvidia shares gained 3%, pushing its market valuation above $4 trillion. The investment represents approximately 215 million Intel shares at $23.28 each, occurring weeks after the U.S. government acquired a 10% stake in Intel.