Intel (NASDAQ: INTC) and Nvidia (NASDAQ: NVDA) announced a partnership focused on developing multiple generations of custom chips for data centers and computing applications, including hyperscale, enterprise, and consumer solutions. Immediately after the announcement, according to TradingView, Intel shares surged 30%.

Intel joins forces with Nvidia

As part of the deal, Nvidia, a leader in the semiconductor sector, is investing $5 billion in Intel by purchasing its common stock at a price of $23.28 per share. Following the announcement, Intel’s stock rose more than 30%, while Nvidia gained 3%. This positive momentum represents a welcome change after weeks of unstable performance and controversies around sales in China, as reported by CNBC.

INTC shares traded at $31.34 and have risen 54.99% year-to-date. A $1,000 investment in Intel at the start of the year would now be worth $1,549.90, representing a gain of $549.90.

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New era in computing

This step comes after a wave of support for Intel, including nearly a $9 billion U.S. government purchase of a 10% stake and a $2 billion investment from Japan’s SoftBank. The deal has the potential to return Intel to the forefront after years of attempting to catch up not only with Nvidia but also AMD (NASDAQ: AMD) and Broadcom (NASDAQ: AVGO).

This historic collaboration tightly couples NVIDIA’s AI and accelerated computing stack with Intel CPUs and the extensive x86 ecosystem — a fusion of two world-class platforms. Together, we will expand our ecosystems and lay the foundation for the next era of computing, stated Jensen Huang, founder and CEO of Nvidia.

The U.S. government is directly involved, signaling a broader interest in maintaining American competitiveness in artificial intelligence. Intel’s new CEO, Lip-Bu Tan, has faced political scrutiny and calls to resign over alleged cooperation with Chinese firms.

Nvidia is also facing export restrictions and an antitrust investigation regarding its $6.9 billion Mellanox acquisition by China, as well as a ban on selling the company’s chips in the Chinese market.