NEW YORK: Shares in chipmaker Intel skyrocketed on Thursday after AI giant Nvidia announced it will invest $5 billion in its struggling rival.
The investment represents a significant commitment to Intel’s turnaround efforts.
Nvidia joins Japanese investment giant SoftBank and the US government in backing the once-dominant chipmaker, which has fallen behind in recent years after missing key technology shifts.
President Trump’s administration surprised the tech industry last month by taking a 10 percent equity stake in Intel, recognizing the strategic importance of the company that powered the PC and internet revolution with its processors.
It is very rare for the US government to take shares in private companies, and Trump has signaled he will be willing to do more such deals that he sees as strategically necessary.
“This is a game changer deal for Intel as it now brings them front and center into the AI game,” said Dan Ives of Wedbush Securities.
“Along with the recent US government investment for 10 percent, this has been a golden few weeks for Intel after years of pain and frustration for investors,” he added.