Nvidia Seeks Trump's Favor through Offering a $5 Billion Intel Equity
In a significant move for the tech industry, Intel and Nvidia have announced a collaboration to jointly develop PC chips and data centers. This partnership, which could potentially put Nvidia's stock in favour with the government, comes after Nvidia's CEO, Jensen Huang, made a $500 billion investment pledge in U.S. manufacturing.
The deal, announced during Trump's presidency, sent Intel's stock soaring by more than 30%. The CEO of Intel who was supported by Trump through this investment is Lip-Bu Tan. He secured a historic government deal and met with Trump, and Nvidia’s CEO Jensen Huang commented on their cooperation.
However, the partnership was not without challenges. In April, Trump imposed a blanket ban on all chip sales to China for Nvidia as part of a greater trade escalation between the two countries. Nvidia CEO Jensen Huang made a months-long effort to get Trump to undo his ban on chip sales to China. Trump later walked back his words and announced a deal that would have the U.S. government take a 10% stake in Intel, according to his announcement. The U.S. government now has a 10% stake in Intel.
The deal allows Nvidia to sell two chips in China, the RTX A6000 and the RTX A6000M. However, Beijing has banned the low-grade RTX Pro 6000D chip in China, one of the two chips Nvidia is allowed to sell there. Despite this, Nvidia's higher-tech chip, the B30A, is desired by Huang for sale to China, but its approval is not yet certain.
Beijing allegedly has confidence in domestic chip offerings being at par with Nvidia's China-specific ones. This confidence is not unfounded, as the U.S. tech industry, including Nvidia, made significant investments during Trump's presidency, with billions of dollars' worth of investment deals announced during his state visit to the UK.
Trump's influence in tech is significant, with major tech CEOs showing solidarity and making significant investments during his presidency. However, the Trump administration has dropped a third of all investigations into big tech.
In the midst of this, Nvidia has a $5 billion stake in Intel. The future of this partnership and the AI race remains to be seen, but one thing is clear: the collaboration between Intel and Nvidia is shaping the future of AI and data centers.
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