Nvidia (NVDA), the world’s largest public company by market cap, said it will invest $5 billion in Intel (INTC) and work with the chipmaker on developing custom data-center and PC products as artificial intelligence becomes more pervasive.
The Santa Clara, California-based maker of the graphic processing units (GPUs) that underpin AI computing will buy shares of its neighbor at $23.28 each, 6.5% lower than Wednesday’s closing price of $24.90, according to an announcement on Thursday.
While Nvidia is known for its GPU production, Intel was a leader in developing microprocessors and entered public consciousness as the provider of central processing units (CPUs) that drove IBM-compatible microcomputers. Its fortunes have declined as AI, with its intensive computing requirements, has taken root.
Intel stock surged 24% on Thursday, taking its market cap to $143 billion. That’s just a fraction of the $500 billion it boasted in 2000, according to companiesmarketcap.com. Nvidia, with a value of $4.23 trillion, rose 1.85%.
The U.S. government bought a 10% stake in Intel last month for $8.9 billion in an attempt to shore up the future of American chip manufacturing.
The crypto industry watches Nvidia’s performance with a keen eye as a proxy for market sentiment, which may reflect in AI tokens and the broader crypto market.