Shares in Intel Corp (NASDAQ:INTC, ETR:INL) rocketed 28% higher in premarket trading on Thursday after a collaboration with Nvidia Corp (NASDAQ:NVDA, ETR:NVD) was announced to design new AI datacenter and personal computing products.
As part of the deal, Nvidia will buy $5 billion of Intel shares at a price of $23.28 apiece.
The pair have agreed to jointly develop "multiple generations of custom datacenter and PC products that accelerate applications and workloads across hyperscale, enterprise and consumer markets", the pair said.
Work will focus on "seamlessly" connecting the architectures of the processors of the two companies.
For data centers, Intel will build Nvidia-custom x86 microprocessors that Nvidia will integrate into its AI infrastructure platforms and offer to the market.
For PCs, Intel will build and offer to the market x86 system-on-chips (SOCs) that integrate Nvidia RTX GPU chiplets in order to power top of the range PCs.
Nvidia CEO Jensen Huang said the collaboration "tightly couples Nvidia’s AI and accelerated computing stack with Intel’s CPUs and the vast x86 ecosystems [and...] lay the foundation for the next era of computing.”
Intel CEO Lip-Bu Tan said the company's x86 architecture has been "foundational to modern computing for decades – and we are innovating across our portfolio to enable the workloads of the future".
He added: "We appreciate the confidence Jensen and the Nvidia team have placed in us with their investment and look forward to the work ahead as we innovate for customers and grow our business."