By Kif Leswing

Copyright cnbc

Tan said he was grateful for Nvidia’s vote of confidence.

“‘I’d like to thank Jensen for the confidence in me, and our team and Intel will work really hard to make sure it’s a good return for you,” Tan said.

Last year, Intel’s board removed previous CEO Pat Gelsinger because of rising costs in its manufacturing business and the company’s failure to gain a foothold in AI chips. In March, Intel named Tan, a well-connected investor who had turned around chip software firm Cadence Design Systems, its new chief executive.

Tan has focused on cutting costs and raising money in his short tenure leading Intel even as the future of the company’s manufacturing business, called Intel Foundry, remains unclear.

In addition to the $5 billion from Nvidia and $8.9 billion from the U.S. government, Intel has taken a $2 billion investment from SoftBank, sold a majority stake in its ASIC subsidiary Altera to Silver Lake for $3.3 billion and sold $1 billion in stock from Mobileye, its self-driving car subsidiary.

Intel has also cut significant staff, saying in July that it would eliminate 15% of its workforce by the end of the year.

The company develops its own chips as well as manufacturing them. It wants to manufacture chips for companies like Nvidia or Apple, but has yet to secure them as customers. Analysts say Intel needs a big foundry client to signal that its technology is stable and ready for volume production.

But cutting-edge chip manufacturing is expensive, and Intel has signaled that if it can’t get enough customers, it may not continue investing in its foundry. That could spark a reaction from Washington, whose politicians and lobbyists consider Intel to be strategically important for the nation because it is the only American company capable of manufacturing the most advanced chips.

The Trump administration took a 10% stake in Intel in August. Intel was previously in line to receive $8.9 billion in grants and loans from the CHIPS Act, but the Trump administration asked and received an equity stake in the chipmaker in exchange for the money.

Huang was with Trump this week in England to attend a State Dinner at Windsor Palace and announce new projects and investments in the U.K. But the Trump administration wasn’t involved in this deal, according to a White House official and Huang.

“Intel’s new partnership with Nvidia is a major milestone for American high-tech manufacturing,” White House spokesman Kush Desai said in a statement.

— CNBC’s Megan Cassella contributed to this story

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