What does Nvidia's investment in Intel mean for the Ohio One plant?
NEW ALBANY, Ohio (WCMH) -- Despite minimal immediate local effects, Ohio leaders were excited Thursday after the world's leading chipmaker announced it will invest $5 billion in Intel.
"Ohio will be the beneficiary in the long run of this," Sen. Jon Husted (R-Ohio) said. "It takes time, but these are great, great steps forward."
On Thursday, Nvidia announced it will partner with Intel to jointly develop datacenter and PC products, and Nvidia will invest $5 billion in Intel through an equity share. Although the investment is unlikely to directly affect Intel's $28 billion Licking County project, it does provide much-needed funding for the financially uncertain company.
Originally scheduled to open this year, Intel's Ohio One project was delayed into 2031 as Intel balanced declining revenue and demand. In July, Intel announced it would "further slow construction" at Ohio's plant, and indicated the future of the plant is reliant on securing new customers. At least eight Ohio One leaders have also departed their positions since July.
Nvidia, the most profitable company in the world, is partnering with Intel's products division. Intel is primarily split into two functions: Products and Foundry, the manufacturing division responsible for Ohio's plant. However, the two former rivals did not rule out a future Foundry collaboration.
Nvidia currently uses TSMC for its chips manufacturing, a Taiwanese company that dominates the chipmaking market. However, the new partnership is expected to use Intel packaging for the partnership, a part of chip manufacturing that occurs near the end of the process.
Currently, there is no indication that the Ohio plant would manufacture the new products, although nothing has been ruled out. An Intel representative confirmed they do not anticipate the partnership initiating a change in their plans for Ohio.
"Intel has said all along that for them to move forward with the fabs in Ohio, that they're going to need a customer," Husted, who was lieutenant governor when Intel invested in Ohio and worked on Ohio One, said. "And this is the perfect customer, this is the partnership I was, frankly, rooting for."
Gov. Mike DeWine's office said it did not have a comment. President and CEO of the Ohio Chamber of Commerce Steve Stivers said this is a big win for Intel, but there is still work needed for Ohio's foundry project. Stivers said Intel will still need to recruit key customers for the Foundry business, although Nvidia's partnership "creates strong momentum."
Stivers' comments on the need to recruit more customers reflect Intel CEO Lip-Bu Tan's assessment of the company's future. In July, Tan said the Foundry's success is reliant on attracting external customers for its new manufacturing technique, set to debut in 2027. Intel said without those customers, the company would have to make tough decisions, including a possible cancelation of Intel Ohio One.
Although the Nvidia partnership is good for Intel, it does not fix the need for new external customers. Intel has made it clear that its Products division cannot be the only customer for Intel Foundry or Ohio One, and although Nvidia brings outside revenue, the project is still half internal.
Husted said it is important to contextualize concerns about the future of Ohio's plant with recent upswings. He linked Intel's Ohio One delays and concerns to Intel's overall financial health. Husted credited recent Intel market successes to President Donald Trump acquiring 10% of Intel stock in exchange for the release of promised federal funding.
"This is complicated," Husted said. "You can't just flip a switch and re-shore an industry with a company that is struggling, but this is great news."