What Nvidia’s stunning $5 billion Intel bet means for enterprise AI and next-gen laptops

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ZDNET’s key takeaways

• Intel’s x86 technology helps Nvidia in enterprise AI.
• Custom chips for laptops will integrate both companies’ technology.
• Nvidia declined to say if it ever plans to use Intel’s factories.

Struggling chip maker Intel received a significant lifeline on Thursday from longtime rival Nvidia. The AI chip giant announced–> it would make a $5 billion investment in Intel and partner to develop chips based on Intel’s x86 microprocessor standard. 

The move is seen as a way for Nvidia to broaden its lead with artificial intelligence by reaching more enterprises that rely on x86 technology to run their IT systems. 

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Intel stock had been up 24% this year through Wednesday’s close, but the announcement drove its shares up by another 23% in Thursday afternoon trading. 

During a conference call Thursday afternoon to discuss the deal, Nvidia CEO Jensen Huang said Nvidia plans to be a “major customer” for Intel’s Xeon line of server CPUs.

“I think it’s safe to say that the partnership that we’re entering into is going to address some $25-50 billion of annual opportunity,” said Huang.

To date, Nvidia has built its own microprocessors, the Grace CPU, on technology licensed from ARM Holdings, which develops intellectual property used by just about every chip maker in the world. 

Also: Intel’s new CEO vows to run chipmaker ‘as a startup, on day one’

Most of the world’s computing can be divided neatly into devices that run some kind of ARM CPU “core,” such as Nvidia’s Grace chip or Apple’s “A-series” silicon for the iPhone, and devices built around Intel’s x86, including PCs and servers from equipment makers who buy Intel and AMD chips.

Did Nvidia sour on ARM?

Some chip-industry observers suggest that Nvidia has soured on the relationship with ARM because ARM, majority-owned by Japanese conglomerate SoftBank Group, has indicated it intends to build its own AI chips, which could compete with Nvidia’s GPU franchise. 

More immediately, Nvidia’s enormous success selling AI chips into the cloud data centers of Amazon, Oracle, and other giants has yet to translate into a large volume of sales into corporate data centers, where ARM-based chips have never made much headway. 

“For the x86 ecosystem, it’s really unavailable except with server CPUs over PCI Express,” said Huang regarding AI computers such as the NVLink-72, Nvidia’s biggest design for a data center computer. 

“The first opportunity is that we can now, with Intel x86 CPU, integrate it directly into NVLink ecosystem and create these rack-scale AI supercomputers.”

Also: Nvidia plans to make DeepSeek’s AI 30 times faster – CEO Huang explains how

In addition to data center machines, Huang said an integrated CPU-GPU part from Nvidia and Intel will enable laptop computers never before seen.

Custom chips for laptops

“The second thing is there’s 150 million laptops sold per year, and Nvidia’s market is largely targeted squarely at gaming and workstation markets where discrete GPUs are used,” he said. “We’re very successful there, we continue to grow there, and we’re going to continue to grow there. There’s an entire segment of the market where the CPU and the GPU are integrated, and it’s integrated for form factor reasons, maybe it’s for cost reasons, maybe it’s for battery life reasons, all kinds of different reasons. That segment has been largely unaddressed by Nvidia today.”

Intel and Nvidia, continued Huang, are creating “an SoC that fuses two processors. It fuses the CPU and Nvidia’s GPU, RTX GPU, using NVLink. It fuses these two dies into one essentially virtual giant SoC, and that would become essentially a new class of integrated graphics laptops that the world’s never seen before.”

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