Nvidia’s Intel Investment Shows How Tangled Tech Companies Are in the U.S.-China Battle

Nvidia CEO Jensen Huang speaks to journalists as he arrives for a press conference in Beijing on July 16, 2025. (Adek Berry / AFP / Getty Images)

Nvidia just got even more tangled up in the U.S. and China’s trade and technology battle.

The artificial-intelligence chip company said Thursday it will invest $5 billion into U.S. chip maker Intel, the latest move by the company as it tries to navigate the U.S.-China technology rivalry.

The U.S. is trying to shore up its lead on advanced semiconductors with more stateside production, and China wants to maintain access to U.S. technology as it tries to become more self-sufficient in chip manufacturing. Nvidia is caught in the somewhere in the middle.

The AI chip leader and other U.S. tech firms continue walk a tightrope as the U.S. and China use export controls and outright bans on their products to gain the upper hand.

“The new investment by Nvidia into Intel is an effort to shore up a leading U.S. semiconductor, and likely comes via pressure from the Trump administration for major U.S. companies to support Intel,” says Paul Triolo, partner at DGA-Albright Stonebridge Group.

Nvidia’s investment comes just a few weeks after the U.S. government took a 10% stake in Intel, and struck an unprecedented agreement to take a share of the revenue Nvidia generates in sales of particular chips to China.

Nvidia Chief Executive Jensen Huang and other U.S. CEOs met with President Donald Trump during his visit to the United Kingdom this week, just before the company unveiled its investment in Intel. Back in Huang successfully lobbied the Trump administration to lift national security-related restrictions on the sale of its AI chip, H20, to China.

Triolo, however, doesn’t think Nvidia received any explicit benefits related to U.S. government export controls in return for its Intel investment. But he says it is possible the investment could help Nvidia apply for licenses to export B30 GPU chips, though Trump has already indicated he might be open to this.

Other experts, though, say U.S. technology companies are attempting to get in the White House’s good graces with such moves.

“I see this as a continued effort to win more favorable policy, including on export controls,” says Henrietta Levin, senior fellow at the Center for Strategic and International Studies in Washington and a former director for China at the White House National Security Council.

U.S. export controls—such as restrictions on China’s access to advanced semiconductor equipment and other critical technology—are a key sticking point for China, and one reason Nvidia is stuck squarely in the middle of the U.S.-China battle. Beijing is trying to build leverage in ongoing negotiations with the U.S. to get those restricted lifted, says Laila Khawaja, who heads Gavekal’s technology team analysis.

In recent weeks, Beijing has turned up pressure on Nvidia, banning sale of its chips and encouraging Chinese companies to use domestically produced chips. Chinese regulators alleged that Nvidia violated its antitrust rules with a 2020 acquisition of Israeli firm Mellanox on the same day U.S. and Chinese officials were meeting on trade and TikTok.

China’s ban on Nvidia’s RTX Pro-6000 chips—which had been customized for use in the country—is largely symbolic, says Khawaja. These chips lack high bandwidth memory and aren’t competitive even inside China. Beijing has also been broadcasting images that compare chips from Alibaba Group Holding and Huawei to Nvidia’s H20 chips favorably.

“The message is: We don’t want your inferior chips. If you want to sell to China, you need to sell us better chips so lobby for [relief on restrictions that allow you to sell us] better chips,” Khawaja says. “Beijing sees that Jensen Huang has lobbying power with Trump so is trying to ramp up pressure on tech executives for further loosening of tech restrictions.”

Even as China bolsters its own chip players and requires state-owned companies to fulfill quotas of domestic chip purchases, Khawaja says there is still demand for superior foreign chips from Nvidia. And while domestic chip orders are robust, some of these chips were purchased due to quotas and aren’t used, she adds. For instance, some companies buy Nvidia chips through third parties since they can’t have them officially on their books, according to Khawaja.

“The end result is that even for state-owned enterprise firms, 90% of their computing power in data centers is powered by Nvidia chips,” she says.

At some point, China’s chip technology could get to a good-enough point that they are able to use fewer foreign chips, allowing Beijing to adopt more restrictive policies against Nvidia. But for now that is still a ways away.

As the Trump administration still mulls sectoral tariffs on the chip industry, it’s likely Nvidia and its peers will continue to be stuck in the middle of the U.S.-China tech battle.

Write to Reshma Kapadia at reshma.kapadia@barrons.com