NVIDIA has today announced it will invest $5 billion in Intel as part of a new collaboration between the two companies. In a statement, NVIDIA said it would work with its ailing rival to “jointly develop multiple generations of custom data center and PC products.”

The Silicon Valley giant threw the struggling rival a financial rope, as Intel shares jump 23 per cent—its highest single gain since 1984

Intel and Nvidia announce a huge partnership to jointly develop multiple generations of consumer CPU and data center products. Nvidia is also investing $5 billion in Intel.

The stake will instantly make Nvidia one of Intel’s largest shareholders, and Intel shares surged on the news.

Nvidia is set to invest $5bn in Intel and will work with the US chipmaker to co-develop custom data centres and PC products. The move by Nvidia follows an announcement made last month about the US government’s $8.

While Intel has collaborated on custom silicon projects in the past, most notably a deal with Amazon last year to produce a custom AI fabric chip and custom Xeon 6 server central processing units (CPUs), the creation of a new group puts custom silicon front and center.