Under the accord the two companies said they will develop custom data center and PC products, as the artificial intelligence boom fuels intense demand for high-performance chips like those made by Nvidia.

Nvidia's chips known as GPUs are in hot demand from tech giants building data centers for artificial intelligence applications.

Nvidia founder and CEO Jensen Huang said in Thursday's statement that the deal marks "a fusion of two world-class platforms. Together, we will expand our ecosystems and lay the foundation for the next era of computing."

The statement said Nvidia will invest $5 billion in Intel common stock at a purchase price of $23.28 per share.

The investment is subject to closing conditions, including required regulatory approvals, according to the two companies.