We Called It: Nvidia Moves into Intel

Way back in November 2024, we argued that Intel’s (NASDAQ: INTC) foundry business could be rescued only with a powerful external partner, the likely candidates being Nvidia (NASDAQ: NVDA) or Taiwan Semiconductor (NYSE:TSM). Our follow-up in January 2025 argued that, despite popular speculation, Nvidia, not AMD (NASDAQ: AMD) or Broadcom (NASDAQ: AVGO), was uniquely positioned to align with Intel.

At the time, skeptics doubted whether Nvidia would or could move in. Yet our thesis was clear: Intel’s excess capacity would be useless without an anchor, and Nvidia was the only company with both the financial strength and the supply-chain needed to justify the partnership.

On September 18, 2025, Nvidia confirmed the logic of our forecast. It announced a $5 billion investment in Intel, acquiring roughly 4% of Intel’s new shares. While not a full acquisition of Intel Foundry Services, the deal validates our thesis. Nvidia has secured influence over Intel, Intel gains a new strategic partner, and Washington’s industrial policy (alas) remains intact.

Equity Stake vs. Acquisition

The structure of this transaction reflects political reality as well as business strategy. In March 2025, Intel appointed Lip-Bu Tan as CEO, drawing sharp criticism in Washington for his China ties. President Trump himself called for his resignation. Shortly thereafter, the U.S. government acquired a 10% stake in Intel for $5.7 billion, cementing Intel as a national champion.

This made an outright Nvidia acquisition politically awkward. CEO Jensen Huang may have viewed the U.S. government as an unattractive partner. The compromise was an equity stake: Nvidia buys in, gains influence and diversifies its supply chain without adding Donald Trump as a shareholder.

Intel’s Strengthened Capital Base

The most immediate effect is to strengthen Intel’s capital base. Intel has been burning cash while trying to fund both new process technology and advanced packaging. It needed the money. Table 1 shows how Intel’s balance sheet has been reinforced this year. Between the U.S. government’s $5.7 billion stake in March, SoftBank’s $2 billion investment, and Nvidia’s $5 billion stake in September, Intel has gained more than $12 billion in new funding. It can continue its 14A process development, purchase High-NA EUV tools, and expand advanced packaging capacity.

Table 1: Intel’s Strengthened Capital Base (2025)

Intel’s recapitalization reduces bankruptcy and dilution risk, restoring confidence in its turnaround. For Nvidia, its $5 billion stake is not dead money, but part of a company positioned to deliver next-gen capacity. For investors, Intel’s stock surge of 30% reflects immediate re-rating potential when capital constraints are removed.

Intel’s High-NA EUV Advantage

ASML’s new High-NA EUV systems are designed to extend Moore’s Law by enabling chipmakers to manufacture at nodes below 2nm, including 1.8nm and beyond. Intel was the first to order these tools and expects delivery between 2025 and 2026.

Table 2 shows how Intel compares to its peers in adopting High-NA EUV. Intel has confirmed orders and near-term delivery, while TSMC and Samsung are only at the evaluation stage. This means Intel could leapfrog into process leadership, giving it the ability to produce the most advanced semiconductors on U.S. soil. Should Nvidia ever decide to shift part of its GPU or accelerator production away from TSMC, Intel will be the only U.S.-based foundry with cutting-edge lithography.

Table 2: High-NA EUV Systems and Strategic Benefits (2025)

Intel’s Advanced Packaging: The Secret Weapon

Beyond lithography, Intel has quietly built a formidable advantage in packaging. While most investors still focus on process nodes, packaging has become equally important in AI systems, where multiple chips must be combined into high-performance modules. We believe advanced packaging of chips will ultimately yield the field to wafer-scale devices, but for now, better packaging is still an advantage.

Intel’s platforms—Foveros, EMIB, and Co-EMIB—enable Intel to connect CPUs, GPUs, and memory in advanced ways that TSMC’s CoWoS platform struggles to match.

Table 3 shows how Intel’s packaging capabilities stack up against competitors. For Nvidia, this may be the most immediate benefit. Its reliance on TSMC’s CoWoS packaging has created bottlenecks, limiting the number of GPUs it can ship into AI servers. By working with Intel, Nvidia gains access to alternative packaging capacity, reducing its dependence on TSMC.

Table 3: Advanced Packaging Capabilities by Company (2025)

Advanced packaging is where Nvidia gets immediate operational relief. TSMC’s CoWoS bottlenecks have capped Nvidia’s AI server output, creating supply shortages. Intel’s packaging capacity not only reduces this risk but could improve Nvidia’s gross margins by lowering costs tied to constrained packaging supply. For Intel, this is an opportunity to monetize strengths independent of process node leadership.

Strategic Benefits for Nvidia

These three pillars—a strengthened capital base, first access to High-NA EUV, and advanced packaging—mean Intel is no longer just a struggling national champion. With Nvidia’s investment, Intel becomes a partner capable of supporting AI infrastructure at scale.

For Nvidia, the benefits are layered. It gains political goodwill in Washington, diversification away from TSMC, and access to Intel’s differentiators in both lithography and packaging. Even if Intel’s 14A process slips, these advantages remain valuable.

Investor Takeaway

Intel’s capital base is secured. Its early lead in High-NA EUV provides Nvidia a future-proof supply hedge. Its advanced packaging gives Nvidia immediate relief from TSMC bottlenecks.

For investors, the lesson is to look beyond surface headlines and see where strategic alignment is inevitable. Our NVDA/INTC prediction was anything but wild. It was a strategic necessity, in a way that an acquisition by AMD or Broadcom never could be. With Intel recapitalized, equipped with next-generation lithography, and advantaged in packaging, the Nvidia–Intel alignment offers supply-chain resilience, political cover, and technology leadership.