First Thoughts on NVIDIA's $5B Investment in Intel

by Brad Gastwirth Global Head of Research and Market Intelligence

Early indications suggest the collaboration centers on co-designed CPUs and platform interconnects, while Intel’s foundry is not currently included. Importantly, this should not be viewed as a pivot away from TSMC, which maintains a clear lead in advanced nodes and packaging that NVIDIA will still rely on for its flagship GPUs.

Why this matters for NVIDIA (NVDA)

  • Platform control & moat widening. Closer alignment with Intel CPUs and interconnects gives NVIDIA more control over system design, reducing friction in AI servers and AI-PCs.
  • Regulatory & geopolitical de-risking. Partnering with a U.S.-backed Intel strengthens NVIDIA’s alignment with Washington’s industrial policy, potentially reducing scrutiny around its China exposure.
  • Optionality beyond TSMC (but not a replacement). While this partnership provides flexibility, NVIDIA cannot substitute TSMC in the near-to-medium term. TSMC remains years ahead in 3nm and 2nm logic nodes and in CoWoS advanced packaging, which are indispensable for NVIDIA’s Blackwell and Rubin GPUs. This move looks more like a hedge and complementary option rather than a shift.
  • AI PC's as the entry point. A jointly defined x86+RTX/AI PC reference design could accelerate local inference on client devices, broadening CUDA adoption.

What Intel gains

  • Capital + credibility. NVIDIA’s $5B follows the U.S. government’s stake, bolstering confidence in Intel’s turnaround story.
  • CPU roadmap pull-through. Jointly developed x86 CPUs paired with NVIDIA GPUs could secure design wins and more predictable attach rates.
  • Competitive edge vs. AMD. Intel gains an opportunity to be the default CPU partner in NVIDIA-heavy racks, threatening AMD’s EPYC share.
  • But foundry isn’t the focus (yet). Intel’s IFS utilization challenges remain unresolved, as this deal doesn’t directly funnel wafers into its fabs.

Why did this happen? Industrial policy alignment. The U.S. government’s direct stake in Intel set the stage for private-sector reinforcement. NVIDIA’s move aligns with Washington’s push to secure domestic compute supply.

Implications for others

  • AMD: Could face attach losses in AI racks if NVIDIA-Intel platforms become the reference standard.
  • TSMC: Remains critical. NVIDIA’s flagship GPUs will continue to tape out and package at TSMC, given its multi-year process-node and CoWoS lead. This deal doesn’t replace that — it’s about platform co-design.
  • Broadcom / networking players: Stronger NVLink + Intel platforms may shape interconnect choices, but Broadcom remains central.
  • PC OEMs: AI-PC reference designs could accelerate adoption, raising premium BOMs for Dell, HP, Lenovo, and others.

Supply-chain impact

  • Advanced packaging. TSMC’s CoWoS remains structurally scarce; Intel’s Foveros is still years behind in maturity. No immediate relief, but if validated, Intel packaging could diversify capacity by 2026.
  • Substrates & interposers. Joint NVIDIA-Intel platforms reinforce demand for ABF substrates and interposers (Unimicron, Kinsus, Nan Ya PCB).
  • Memory (HBM). Any acceleration in NVIDIA’s platform volumes tightens HBM demand further; Micron, SK hynix, and Samsung remain key bottlenecks.
  • System components. Stronger pull expected in CXL-ready boards, VRMs, MLCCs, racks, and NVLink interconnects, with ODMs benefitting from tighter platform blueprints.

What to watch

  1. Details of first co-developed platforms (CPU specs, NVLink integration, CXL readiness).
  2. Any shift toward Intel Foundry Services—a major signal for future capacity diversification.
  3. OEM adoption of co-designed servers and AI PCs.
  4. Competitive responses from AMD, ARM vendors, and TSMC.
  5. Policy tailwinds/headwinds, especially around export controls and government procurement.

by Brad Gastwirth Global Head of Research and Market Intelligence