Nvidia’s $5B Intel Bet Doesn’t Fix Chipmaker’s Biggest Problem

​A Market Jolt, but Not a Cure
Wall Street cheered when Nvidia announced a $5 billion investment for a 4% stake in Intel, sending Intel shares soaring nearly 30% in a single day. But beneath the excitement, analysts warn: this doesn’t fix Intel’s most pressing issue — its money-bleeding foundry business.

The Partnership Pitch
As part of the deal, Nvidia will use Intel’s CPUs in its AI server systems, while Intel gets to integrate Nvidia’s AI technology into its PC chips. It’s a big handshake moment — but one that carefully skirts Intel Foundry Services, the segment that’s burning billions.

Foundry Woes Pile Up
Intel launched its foundry arm in 2021 under then-CEO Pat Gelsinger, hoping to win back relevance by making chips for outside customers. Instead, losses ballooned from $7 billion in 2023 to $13 billion in 2024, helping drag Intel’s stock down 60% last year. The failure cost Gelsinger his job, but the red ink hasn’t stopped. Analysts warn the business could bleed cash until at least 2027.

Customers Missing in Action
So far, big-name clients have stayed away. Even at Thursday’s press conference, Intel and Nvidia hinted they’d rely on TSMC — Intel’s archrival — to manufacture new chips in the near term. That stung, since the U.S. government has championed Intel’s foundry push as a national security priority.

Why Washington Cares
Intel is the only large-scale U.S. chipmaker still capable of producing cutting-edge semiconductors, including those for the Department of Defense. With most advanced chips coming from Taiwan’s TSMC — and fears of Chinese aggression looming — the survival of Intel’s foundry is seen as critical to U.S. tech independence.

A Glimmer of Hope?
Some analysts think the Nvidia deal could still boost Intel’s credibility, paving the way for future cooperation. At minimum, it could pressure Nvidia to test Intel’s foundry services down the line — even if just in a token way.

The Bottom Line
​Nvidia’s $5 billion lifeline may have given Intel stock a short-term boost, but it dodged the elephant in the room: a foundry business drowning in losses. Unless Intel lands real customers — and fast — its biggest problem is far from solved.