Partnership sealed: Nvidia buys Intel shares

On December 26, Intel issued around 215 million new shares and sold them to Nvidia at a preferential price of five billion US dollars. Intel reported this to the US Securities and Exchange Commission (SEC) on Monday. This seals the partnership between Nvidia and Intel announced in September. Nvidia now holds approximately 4.5 percent of all outstanding Intel shares, diluting the stakes of existing shareholders accordingly.

The partially state-owned US corporation Intel is not just supposed to manufacture chips for Nvidia; both companies intend to jointly develop hybrid processors. Among other things, they plan processors with x86 processor cores and GeForce GPUs (Graphics Processing Units). The GPU and CPU chiplets will communicate with each other via NVLink, a high-speed data bus developed by Nvidia. The latest NVLink version 5.0, with 18 links and four lanes per link, can transfer up to 1.8 terabytes per second between CPU and GPU (combined in both directions). That's a lot.

Intel is in a crisis. In August, management felt compelled to gift almost ten percent of the company to the US government. In return, US President Donald Trump released subsidies that Intel was entitled to under existing US laws but which Trump had withheld.

Discount price for Nvidia

Nvidia has now paid 23.28 US dollars per share to Intel. This is about 6.5 percent below the closing price on the day before the agreement was announced. The agreement has given Intel's share price a boost. The closing price before the last trading day before the issuance of the new shares is even more than 50 percent higher than the price paid by Nvidia.

Nvidia is the most important supplier of processors for large AI systems. Since the summer, it has been the most valuable company in the world by market capitalization. After the US government and the financial investors Blackrock and Vanguard, Nvidia is now likely the fourth-largest Intel shareholder.

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