Nvidia Bets $5 Billion on Intel to Plug Its CPU Gap and Pressure AMD

Nvidia will invest $5 billion in Intel at $23.28 per share and the two firms will co-develop multiple generations of PC and data-center products, including custom x86 CPUs that hook into Nvidia platforms. This gives Nvidia a credible x86 path alongside Grace and plugs the long-standing “no CPU” hole in PC and traditional x86 servers.The backdrop is strong execution: in Q2 FY26 Nvidia posted $41.1B in Data Center revenue (+56% YoY, +5% QoQ) and $4.3B in Gaming (+49% YoY, +14% QoQ), with Blackwell data-center revenue up 17% QoQ. The Q3 outlook assumes no China H20 shipments.

Financially, $5B is small versus Nvidia’s $56.8B of cash, cash equivalents and marketable securities as of quarter-end.

Intel will design and manufacture custom client and data-center CPUs for Nvidia. That looks like ASIC economics—contracted volumes and clearer cost visibility—tied to Nvidia's growth. The flip side is channel conflict with Intel's own Core and Xeon lines, so investors should watch product fencing and pricing.

Intel is arguably a major loser in the current AI wave. Its "Datacenter and AI" business name is somewhat of a misnomer, as revenue is overwhelmingly from server CPUs, not AI accelerators. Even in its server CPU stronghold, Intel continues to lose market share to AMD, which has grown its x86 server share from under 5% to over 40% in recent years.

Intel's Q2 server CPU revenue grew YoY, driven by strong hyperscaler demand and its selection as the host CPU for NVIDIA's DGX B300. Unit shipments rose 13% YoY, but ASPs fell 8% YoY due to a price war with AMD. Management admitted it has a significant performance gap with AMD at the high end and is still playing catch-up.  

AMD now faces a tighter Nvidia-Intel combo in both PCs and servers. AMD's latest quarter was solid—Client revenue hit a record $2.5B (+67% YoY) and Data Center was $3.2B (+14% YoY)—but coordinated Nvidia-Intel offerings could challenge AMD for OEM sockets in 2026 builds.

In recent years, AMD's market share gains against Intel have been primarily in the PC and Data Center CPU businesses. Revenue from the Client business, led by PCs, has seen high double-digit growth for eight consecutive quarters, with its operating margin continuously approaching Intel's. Against the backdrop of a continued decline in Intel's Q2 client business operating margin, AMD finally achieved an overtake in Q2.

This tie-up does not displace TSMC. Nvidia still relies on TSMC for leading nodes and, critically, CoWoS advanced packaging. Industry trackers indicate TSMC remains the major CoWoS supplier and Nvidia has secured the largest share of 2025 capacity. Even if some future Nvidia tiles move to Intel, TSMC's node lead and CoWoS bottleneck keep it central.

Nvidia gets a practical CPU leg. Intel converts rival demand into custom CPU revenue but must police overlap with Core and Xeon. AMD faces a tighter squeeze across client and server. TSMC remains the indispensable node and packaging partner. Arm keeps real momentum but a faster x86 rebound could cap share gains in servers.

Check out moomoo's past insights on Nvidia: