Cash injection follows government investment in chip giant
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Image: Shutterstock/Dennis
The American chip giant Nvidia is buying $5 billion worth of shares in competitor Intel. The two tech companies will also collaborate on developing products that will make data centers and PCs run faster.
Last year, Intel posted a loss of nearly $19 billion. The company also reported negative results in the second quarter of this year.
The chip giants want to leverage each other’s expertise in the production of processors and AI systems. “We are now laying the foundation for a new era in computing,” said Jensen Huang, Nvidia’s CEO.
Nvidia is following the example of the US government, which last month acquired an $8.9 billion (€7.6 billion) stake in Intel.
That operation didn’t actually cost the United States any money. As part of the 2022 Chips Act under then-President Joe Biden, Intel received a credit package of $8 billion (€6.8 billion). Those loans were fully converted into shares. Thanks to this investment, Washington is now Intel’s largest individual shareholder.
The extra capital from the government and Nvidia is more than welcome for Intel. Last year, the chipmaker posted a loss of nearly $19 billion (€16.15 billion). It was the company’s first loss since 1986, according to news agency Reuters.
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