The Federal Trade Commission cleared the $5 billion deal between Nvidia and Intel to join forces in selling semiconductor chips to compete with other manufacturers.
The two companies announced the strategic partnership in September, but it needed approval from federal antitrust agencies. The FTC posted the notice of approval on Thursday.
The nation’s consumer protection agency did not explain why it granted the Nvidia-Intel deal.
Nvidia invested $5 billion in Intel stock at a purchase price of $23.28 per share to collaborate with Intel in developing artificial intelligence and chips for next-generation personal computing products and data centers. The agreement integrates Nvidia’s graphics processing units with Intel’s central processing units to rival competitors, such as the Taiwan Semiconductor Manufacturing Company and U.S.-based AMD.
Nvidia’s market dominance in AI has sparked antitrust concerns, considering the American technology company controls an estimated 85% to 95% of the data center GPU market. Its place in the AI market would be further solidified if its deal with Intel were to close.
In 2022, the FTC successfully blocked Nvidia from merging with U.K.-based chip design provider Arm for a $40 billion purchase. Nvidia is not merging with Intel.
The FTC’s approval suggests federal regulators don’t see the major chip deal as an immediate antitrust violation.
The news was reported by Reuters on Friday, leading to a large boost in stock for both Nvidia and Intel.
TRUMP OKS SALE OF NVIDIA AI CHIPS TO CHINA AND THREATENS MEXICO WITH 5% TARIFF PENDING WATER RELEASE
Earlier this month, President Donald Trump said he would allow Nvidia to sell the advanced H200 computer chip to commercial customers in China. The move is intended to undercut the demand for Chinese-made chips. The Trump administration is reviewing the sale.
The federal government obtained a 10% equity stake in Intel, becoming a major shareholder in the chip manufacturer, one month before Nvidia announced its $5 billion stake.
