The Peter Zeihan Podcast Series - Nvidia Purchases $5 Billion of Intel Stock || Peter Zeihan

Episode Date: September 26, 2025

Nvidia announced a $5 billion purchase of Intel stock, but it's not the game-changer that the headlines are making it out to be.Join the Patreon here: https://www.patreon.com/PeterZeihanFull Newsletter: https://mailchi.mp/zeihan/nvidia-purchases-5-billion-of-intel-stock

Hey all, Peter Zine here, coming to you from Colorado, and today we're taking a look at the 18th of September purchased by Navidia of roughly $5 billion of stock in American semiconductor manufacturing firm Intel. Now, Intel is by far the largest of the American fab companies, but it gets a bad rap because it's not TSMC. TSM, of course, is a Taiwanese-based company that is the world's premier that makes all the leading processing nodes, especially if it's below four nanometers. Intel is trying to catch up with mixed results. and in the market it generally is discounted significantly because it's not TSMC and every time they fail to catch up, they get punished. That doesn't mean it's not a good company. That doesn't mean it doesn't produce a lot of product. But if your goal is to make the best of the best, until it doesn't do it. This is not going to change that.

Now, a few weeks ago, the U.S. government under Donald Trump took a 10% share. This will give NVIDIA roughly a 4% share. But let's talk about how semiconductors happen and then you'll see that this is, not nearly as big of a deal as it might appear at first glance. What typically happens is a large consumer of microchips, a Google and Apple, something like that, comes to a company like Intel or TSM and says that we want to make a new chip that does X, Y, and Z. Here are the parameters we want in terms of performance. And Intel slash TSM says, you're at the wrong place. You need to go talk to a design firm. And so you find a design firm and you jointly put this thing together,

all the strategic architecture. And then you take that back to your TSM or your Intel and then you redesign it again and you build an instruction booklet that is a few thousand pages of all the steps that are necessary to craft each and every tiny little bit of what goes into each and every aspect of a semiconductor. That is then farmed out to an ecosystem that is a the semiconductor fabrication firm, all the companies that build all the individual pieces, all the companies that do all the testing and the incorporation of those pieces into larger chips, motherboards, and end products. Hundreds of companies involved.

And you then get this very thick instruction book, probably several thousand pages now, which you hand to TSM or you hand to Intel, and they use that to follow the instructions to the letter to make the chips. Which means a design company like Navidia partnering with a fab company like Intel. It's not that it's a negative, but it kind of misses all the steps in between. Now, Navidia has been beat around the hedge and shoulders, first by the American government and most recently by the Chinese government, primarily over its seeming inability and unwillingness to apply technological sanctions

and limit their sales to China. NVIDIA is willing to bend the rules. There's no argument there. And it seems that in order to placate the Trump administration, they're putting a, what sounds like a big investment, $5 billion, into Intel. But this really doesn't move the needle for anyone. It doesn't speed up the process. All it does is perhaps give Navidia an inside track to communicating with Intel in the circumstances when they decide to build chips that are not cutting edge. So it makes a lot of people smile.

it makes a lot of people think that, ooh, Intel's going to get better. Navidia doesn't have what Intel needs to get better. That would be TSM. That would be ASML, the Dunch Company that makes the high-end lithography systems. That would be this constellations of dozens, hundreds of mid-tier companies that contribute individual pieces, a lot of which don't exist in Intel's network because they're in Taiwan. So it looks nice, and having a few extra billion dollars is never a bad idea if you're trying to expand at your output.

But if you're thinking that this partnership is what is necessary for Intel to turn the page and all of a sudden move up to say two or one nanometer, no, because Navidia doesn't have that technology. Navidia does design, not manufacturing. Don't get the two confused.