Nvidia and Intel, Together at Last?

The Great Unbundling

There are two ways to build a chip empire. On one side is vertical integration, the old-guard model where a company like Intel designs and manufactures its own silicon. On the other is specialization, the modern approach where a "fabless" company like Nvidia designs the chips and lets a dedicated foundry like TSMC handle the manufacturing. On Thursday, the two philosophies collided in a fascinating way: the specialist kingpin took a $5 billion stake in the integrated incumbent.

The Nvidia-Intel deal is, on its face, a partnership. But a closer look perhaps reveals something more profound. It is a market-driven dissection of Intel, with Nvidia cherry-picking the valuable parts while leaving the troubled ones behind.

The logic for Nvidia is brutally elegant. The partnership allows it to deepen its reach into massive markets while simultaneously boxing in its most effective rival, AMD, whose stock dropped 5% on the news. For years, AMD has successfully chipped away at Intel's CPU market while also challenging Nvidia in GPUs, often by offering a compelling integrated package. This new alliance creates a formidable, two-headed competitor designed to halt that advance on both fronts. The deal will see Nvidia supply powerful RTX GPU chiplets to be integrated directly into Intel's next-generation PC chips. In the data center, Intel will design custom x86 CPUs to be tightly coupled with Nvidia's GPUs using its high-speed NVLink interconnect. Here is Mizuho analyst Jordan Klein on the dynamic, via Yahoo Finance:

Klein wrote, "No way to sugar coat or look past that NVDA could have gone with AMD who has CPU and gaming for PCs, but had to buy into INTC due to Trump... To me this sort of pressures and squeezes AMD overall a lot more. They face intense pressure vs NDVA for GPUs... And now you have a lot more pressure and risks to your GPU / CPU product platform from NVDA & INTC."

For Intel, the deal is a lifeline that simultaneously exposes its fundamental weakness. It validates the world-class quality of its chip design teams, but the partnership's manufacturing arrangement is surgically precise. It pointedly excludes Intel's core wafer fabrication for Nvidia's own flagship GPUs; that business will remain safely with its primary partner, TSMC. However, it does include a role for Intel's factories to produce the custom CPUs for the partnership, and crucially, gives Nvidia access to Intel's world-class Foveros 3D packaging.

This only strengthens the argument, laid out by the Wall Street Journal, that the company's integrated model is fundamentally broken. By striking a deal that so clearly benefits one half of Intel (design and packaging) while selectively using—but not fully committing to—the other (wafer manufacturing), Nvidia has inadvertently done more than just provide a vote of confidence; it may have accelerated the inevitable day when Intel is finally forced to split itself in two.

Google's Defensive Moat

It is a deeply weird turn of events. Just last month, a federal judge decided that Google would not have to sell its Chrome browser, in part because the rise of AI startups was seen as a new and potent competitive threat. This week, Google is using the very asset it was allowed to keep—Chrome—to try and crush that very threat.

On Thursday, Google announced it is rolling out its powerful Gemini AI directly into its Chrome browser for all users. This is not just another chatbot in a sidebar; it is a deep integration that transforms the world's most popular browser into a sophisticated AI assistant. Here is CNBC on the new capabilities:

Users will be able to ask Gemini for help understanding the contents of a particular webpage, work across tabs, or do more within a single tab, such as schedule a meeting or search for a YouTube video. ... In the coming months, users will be able to ask the Gemini agent to do certain tasks, such as booking a haircut or ordering weekly groceries.

This is a classic "embrace and extend" strategy. For months, Google has been watching AI-native startups like Perplexity and OpenAI try to chip away at its search dominance by building their own browsers. Their argument is that the browser is the natural home for an AI "agent" that can do things on your behalf. Google's response is to turn Chrome into an even better agent, leveraging two advantages that no startup can match.

The first is its sprawling ecosystem. Gemini in Chrome is not just an AI; it is an AI that is seamlessly plugged into Maps, Calendar, and YouTube. It can book your haircut because it is already logged into your life. The second is scale. By pushing this to all Chrome users, Google is instantly deploying a sophisticated AI assistant to a user base of nearly 3 billion people, a distribution advantage that is almost impossible to overstate.

The whole thing is a masterful defensive maneuver. The very rise of AI that was supposed to weaken Google's monopoly is now being used as the justification to strengthen its most powerful defensive moat. The browser wars are back, and the incumbent is betting that its scale and ecosystem will be enough to suffocate the upstarts in their cradle.

The Scoreboard

• Data Center: Microsoft is turning Foxconn’s empty buildings into the ‘world’s most powerful’ AI data center (The Verge)
• SaaS: Notion rides AI boom to $500 million in annual revenue, but Microsoft competition looms (CNBC)
• AI: Nvidia just spent over $900 million to hire Enfabrica CEO, license AI startup’s technology (CNBC)