The companies will focus on seamlessly connecting NVIDIA and Intel architectures using NVIDIA NVLink — integrating the strengths of NVIDIA’s AI and accelerated computing with Intel’s leading CPU technologies and x86 ecosystem to deliver cutting-edge solutions for customers.

Intel (NASDAQ:INTC) stock surged on Thursday after unveiling a sweeping partnership with Nvidia (NASDAQ:NVDA) to co-develop custom chips and next-generation systems, a breakthrough that thrusts the long-struggling chipmaker into the center of the artificial intelligence boom and signals a new front in the global race for computing dominance.

Intel shares surged more than 20% after CEO Lip-Bu Tan announced a landmark partnership with Nvidia's Jensen Huang to co-develop AI chips, a deal that includes a $5 billion Nvidia investment and positions both companies at the center of the next era of computing.

Shares of Intel ( INTC 22.81%) are flying this week, up 27% as of market close on Thursday. The jump comes as the S&P 500 and Nasdaq-100 gained 0.7% and 1.5%, respectively. The chipmaker's stock exploded this week after Nvidia announced a $5 billion investment and "multigeneration" partnership agreement with Intel.

Nvidia shocked investors by taking a 5% stake in Intel—and the U.S. government is a big winner.

What Happened in Markets Today Nvidia bets $5 billion on Intel. Intel's shares jumped 23% by the closing bell, even after both companies made clear that the deal [doesn't involve volume commitments](