Nvidia’s $5B Intel Bet Sparks Stock Surge, But Losses Loom

- Nvidia's $5 billion investment boosts Intel stock 30%, signaling confidence in chip design. - Deal avoids Intel's struggling foundry business as manufacturing losses escalate. According to Cryptopolitan on September 21, 2025, Nvidia acquired a 4% stake in Intel for $5 billion, causing Intel's stock to surge 30%. With this investment, Nvidia aims to integrate Intel’s CPUs into its AI data center servers and enhance Intel’s PC chips with its own AI technology. The deal highlights Intel’s chip design strengths while steering clear of its financially strapped foundry division. Intel Foundry Services, which manufactures chips for external companies, remains a major challenge, having posted operating losses of $7 billion in 2023 that worsened to $13 billion in 2024. Furthermore, Intel projects it will not reach break-even margins until 2027, deepening skepticism about its turnaround. Nvidia's choice to continue using Taiwan Semiconductor Manufacturing Company (TSMC) for chip production further underscores the challenges facing Intel’s foundry. The U.S. government has launched initiatives to boost domestic semiconductor capacity, including direct investments in Intel. Despite this, Nvidia’s continued manufacturing allegiance to TSMC signals lingering doubts about Intel’s competitive potential. TSMC and Samsung dominate the global chipmaking market, leaving Intel Foundry Services struggling to gain traction. As a result, analysts believe Nvidia’s decision to exclude Intel’s manufacturing arm is a stark reminder of the division's financial and operational hurdles. Industry analysis of Nvidia’s strategic move varies. Some analysts interpret the deal as an effort to outmaneuver competitors like AMD, while others question if Intel can resolve its manufacturing losses without external intervention. Bank of America and Bernstein suggest Nvidia's collaboration could eventually benefit suppliers; however, the widespread consensus points to persistent ambiguity surrounding Intel’s recovery timeline. Nvidia CEO Jensen Huang emphasized that the U.S. government played no role in the partnership. However, the move aligns with Washington's software-focused approach to supporting domestic chip production. This strategy leaves Intel’s foundry ambitions sidelined. In addition, Nvidia remains committed to TSMC for its manufacturing needs, which reflects the ongoing competitive and financial pressures on Intel.