Nvidia's Huge Money Move Won't Solve Intel's Biggest Problem

Intel announced, back in February 2024, the launch of its Foundry System. This full service semiconductor chip manufacturing and packaging process for AI systems — celebrated in front of the U.S. Secretary of Commerce and several of the most prominent Tech CEOs in the U.S. — should've been a boon to its stock price. However, by December of the same year, the company had shed its former CEO, as much as 60% of its share price, and 7% of its revenue in Q4 year-over-year. Then, a lifeline came in the form of a September 2025 announcement that Nvidia would invest $5 billion in Intel, and collaborate on the build-out of AI data centers and personal computing products. However, there are still questions about whether this investment from Nvidia — as well as an $8.9 billion 9.9% stake in Intel by the Trump administration, on top of another $2.2 billion in CHIPS grant funding — will be enough to right the ship.

As per Webull, the announcement boosted Intel's share price by 48% — or a market value of $50 billion. While it might seem like a strange move for Nvidia to invest in one of its own top competitors in the semiconductor sector, Nvidia is inarguably still considered the world's most important stock – with a valuation of over $4.2 trillion. This perhaps makes the potential upside of a mere $5 billion investment in Intel worth the risk. However, while skyrocketing valuations and tech company share prices offer proof of investors' hopes for AI, Intel's ongoing struggles demonstrate that it's not just about having the ability to manufacture product.  

The rule of supply and demand dictates that you need customers who will buy what you're selling. However, after opening up the manufacturing side of Intel's Foundry Services to third-party competitors — at an estimated cost of $100 billion — the ambitious idea to expand to become the second largest semiconductor manufacturer in the world by 2030 was stalled by Intel's inability to pick up enough large clients to make a profit. Although Nvidia is putting its money where its mouth is with a 4% stake in Intel's central processing units (CPUs) in exchange for Nvidia's chip technology, the manufacturing arm of Intel Foundry Services wasn't included in the contractual agreement.

Considering Nvidia is one of the many popular companies concerned about the impact of tariffs on its business, and how Intel's manufacturing capabilities on U.S. soil could help to eliminate additional tariff costs, leaving out Intel's manufacturing arm could end up being a missed opportunity. Although foreign entities like Taiwan Semiconductor Manufacturing Company (TSMC) are bringing manufacturing to the U.S. in a bid to avoid tariffs, the Wall Street Journal reported that the Trump administration wants American chip-makers to domestically produce just as many chips in the U.S. as the company currently imports — a tall order.

Aside from the domestic manufacturing goals of the U.S. government being in lockstep with Intel's aims as a chip manufacturer, according to Tech Space 2.0, Apple is also in talks to invest with Intel — this time with the company's Foundry Services chip manufacturing arm. In September 2025, Softbank also committed to a $2 billion investment in the company's chip manufacturing division as part of their agreement with the Trump administration to invest $100 billion into the U.S. over the next four years. In August 2025, per TechRadar, Amazon Web Services purchased a large order of Intel's custom Xeon chips, further boosting the profile and marketability of the struggling tech company.

Intel also plans to spin-off its Foundry Services manufacturing arm from the rest of the company's operations, complete with its own separate board of directors. The company also laid off 15% of its workforce to help balance out its losses as part of a broader strategy to save $10 billion. While perhaps not yet considered an appealing Nvidia stock alternative, Intel does appear poised to make a run at just that. With Nvidia currently trading at just over $177 per share, as of late September, and Intel trading at just over $35 per share, Intel could be the best way to invest in AI if you're also on a budget.