Nvidia to invest $5B in Intel and develop chips with onetime rival

Nvidia, the semiconductor company powering the artificial intelligence revolution, said Thursday that it was buying a $5 billion stake in ailing rival Intel

Nvidia, the semiconductor company powering the artificial intelligence revolution, said Thursday that it was buying a $5 billion stake in ailing rival Intel.

The two companies will also begin a partnership to develop chips together for PCs and data centers.

Intel shares surged 23% on the announcement, lifting its stock market value to $143 billion. The stock is now up about 52% this year. Nvidia, valued at more than $4.2 trillion, advanced 3.5%.

The announcement Thursday from Nvidia comes just weeks after the U.S. government purchased a 10% stake in Intel, worth nearly $9 billion, and after Japan's SoftBank invested $2 billion.

“This is a game changer deal for Intel as it now brings them front and center into the AI game,” wrote tech analyst Dan Ives in a note Thursday. “Along with the recent U.S. Government investment for 10% this has been a golden few weeks for Intel after years of pain and frustration for investors.”