When considering Nvidia’s GPU and parallel computing dominance, it’s important to take a look at how it can capitalize on product growth of the GenAI era. Last week, Nvidia announced a deal that would invest $5 into flailing Intel – a move that is great for Intel in the short term, that can use all the funding it can get for survival, but it also may be a better contract for Nvidia, itself.

According to the terms of this deal, Intel will build Nvidia’s tech stack onto its current X68 architecture’s SoC, giving Nvidia an even stronger foothold outside the data center, mobile, manufacturing and vehicle. It’s worth mentioning too that AMD and Nvidia do have some overlap in competition that would only increase with this arrangement. According to Gizmodo:

Intel and Nvidia’s new buddy-buddy attitude may offer more competition for AMD, though it could take a different form than AMD’s all-in-one approach. We won’t know yet what variety of chimera chip this will eventually look like. In the Q&A, Huang said he hopes the partnership will “address a vast majority of the PC consumer notebook market.”

Nvidia, like all tech firms highly leveraged in one category, mainly the data center, it must diversify to keep the firm growing amidst the possibility of the AI bubble bursting. It’s no secret that Nvidia has wanted to enter the CPU market for some time, entrenching on a dominant Intel/AMD desktop and laptop majority sector. As ARM, the energy efficient, mobile first architecture is taking rapidly taking over this legacy and aging x86 architecture, it only makes sense for Nvidia to put its dominance to work in vertical sectors.

Given Intel’s struggling fabrication business, it makes sense for Nvidia to potentially take over this division and utilize it to manufacture both firm’s chips, obviously giving itself primary utilization since it would control a portion of Intel’s stake. Integrating efficient Nvidia technologies into inefficient and broken Intel processes, could fast-track the innovation Intel needs to abandon x68 and at last, properly move to ARM architecture.

With all of Intel’s short-comings as a firm, they still control over 80-percent of the market, which would allow Nvidia to gain a significant foothold by lending technologies to finally right-size the product line. Nvidia using Intel as a trojan horse into the dominant CPU market can only be a gain for Nvidia as it seeks to diversify but also leaving Intel no choice as it scrambles to seek investments from outside firms.

It’s too early to tell whether Nvidia will eventually acquire Intel all together, but if they are the one firm to truly right the ship at the legacy chipmaker, this $5 billion deal will seem like a bargain in only a few years. Given all the information we know at the moment, this is a win-win for Nvidia for all of the above reasons. At the very least, this small investment on Nvidia’s part could change the industry as we know it.