This move comes soon after a whirlwind of corporate and political drama involving Intel, America’s one-time semiconductor chips champion, that saw President Trump call for the resignation of CEO Lip-Bu Tan, his sudden reversal, and then the U.S. government itself making an unprecedented investment into Intel, taking a nearly 10% stake in the process.

Nvidia, the world’s leader in artificial intelligence chips, announced it will invest $5 billion in Intel’s common stock at a discounted price of $23.28 per share. The news prompted a premarket surge in Intel shares of a whopping 30%. Nvidia CEO Jensen Huang hailed the deal as a “historic collaboration” that will tightly couple Nvidia’s AI and accelerated computing stack with Intel’s central processing units (CPUs) and its x86 ecosystem. Specifically, Intel will build and bring to market x86 system-on-chips (SOCs) that integrate NVIDIA RTX GPU chiplets.

“AI is powering a new industrial revolution and reinventing every layer of the computing stack — from silicon to systems to software. At the heart of this reinvention is NVIDIA’s CUDA architecture,” Huang said in the press release on the announcement. Together, he added, the companies will expand their ecosystems and “lay the foundation for the next era of computing.”

“Intel’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,” said Lip-Bu Tan in the same release. He added that Intel’s data center and client computing platforms, and its process technology, manufacturing and advanced packaging capabilities, will complement NVIDIA’s “AI and accelerated computing leadership to enable new breakthroughs for the industry.”

Trump’s demand and fast reversal

The partnership follows a dramatic series of events that began in August, when President Trump, via Truth Social, publicly demanded the Lip-Bu Tan’s resignation. Trump called Tan “highly conflicted,” citing reported ties to Chinese tech interests and mounting national security concerns raised by lawmakers and the media, specifically reporting in the Financial Times and Reuters and a strongly worded letter from Sen. Tom Cotton. Tan, previously at Cadence Design and a respected figure in Silicon Valley, rebuffed the demands, asserting his commitment to the “highest legal and ethical standards,” but did not confirm divestiture from the flagged firms.

Just days later, Trump reversed course during a White House meeting, praising Tan’s “amazing story” and inviting him for further cabinet-level discussions. The shift followed bipartisan calls to strengthen America’s semiconductor industry amid rising technological competition with China—a sentiment that foreshadowed the federal government’s own historic actions. Four former Intel directors had written a commentary for Fortune shortly before this drama ensued, expressing a lack of faith in current leadership, including Lip-Bu Tan. Fortune‘s Geoff Colvin reported that Intel has been widely understood to have fallen into a 20-year decline.

Nvidia—the most valuable company in the world with a market cap over $4 trillion—slightly disappointed markets in its last earnings report as sales of chips in China were missing compared to previous quarters. The backdrop, as reported by Fortune‘s Nicholas Gordon, is that China is racing to essentially create its own version of Nvidia.

Since 2022, Nvidia has been barred from selling its most advanced chips to Chinese companies, and it’s attempted to work around that with new chip designs that can be sold, but that has also been tough sledding. Washington is tightening its export controls, and Nvidia is designing new products to comply, but pressure from Beijing remains, with a finding this month that Nvidia violated Chinese antitrust laws. Nvidia warned in its earnings that it “may be unable to create a competitive product for China’s data center market that receives approval from the [U.S.] government.” The alliance between Nvidia and Intel, then, reflects a focus on strengthening America’s chips champions.

Jefferies analyst William Beavington wrote in response to the news that “Operation Save Intel is well underway … can’t help but wonder if the gov’t had any hand in this …” He also noted that the deal terms represent a 6.5% discount to Intel’s last close, which is slightly more expensive than the $20.47 per share that the U.S. government paid for its $10 billion stake in Intel, but similar to the $23-per-share, $2 billion deal that Intel struck with Softbank in August.

Nvidia and Intel declined to comment beyond the press release announcing the investment. The companies will be holding a press conference at 10 am PST.