CNBC Daily Open: Nvidia is deploying its cash to cement its position

A conundrum I’d never have to face: After finding sudden success, what should I do with my piles of cash?

The lucky subject here is Nvidia, which transformed overnight from a graphics card manufacturer mostly obsessed over by gamers who wanted to max out their graphics settings, to a chipmaker at the center of the artificial intelligence boom.

In 2023, Nvidia was at the cusp of being valued as a trillion-dollar company. Two years later, its market capitalization is not $2 trillion, not $3 trillion, but $4.28 trillion. That’s 12 zeros after the first figure.

So — how does the company put its money to work? Rolling around in dollar bills is one of life’s greatest pleasures, but any CEO and investor worth their salt knows cash can be a drag on revenue and returns.

While Nvidia has refrained from making splashy acquisitions, it’s taking stakes in, and partnering with, other AI firms, making sure they — and the wider industry — continue orbiting around it.

On Wednesday, it announced a staggering $5 billion investment in its one-time rival Intel, which would enable collaboration between the two chip giants.

News also broke the same day that Nvidia had spent nearly $1 billion to hire the CEO of an AI startup and to license its technology, while on Tuesday the chipmaker unveiled £11 billion ($15 billion) of investment in the U.K, part of which will be used to deploy 120,000 Blackwell chips in the country.

OpenAI and other companies such as Anthropic and DeepSeek kicked off the “talk to a computer” frenzy. But “the big part of the story is the hardware,” “Steve Eisman, the investor who called the subprime crisis, said on CNBC’s “Squawk Box” Thursday.

That means Nvidia, if it manages to hold on its position as market leader — a feat not guaranteed, given up-and-coming competition from Chinese chips — might have to look for more avenues to channel its cash toward. But what a pleasant task that would be.

—  Yeo Boon Ping

Nvidia announces $5 billion investment in Intel. The chipmaker joins the U.S. government and Softbank in taking a stake in Intel. Shares of Intel popped 22.8% Thursday — their best day since October 1987 — on news of the deal.

Nvidia spends over $900 million to hire AI startup CEO. Apart fromemployingRochan Sankar, the chief executive of Enfabrica, Nvidia is also licensing the company’s technology — which it claims can connect more than 100,000 GPUs together.

Trump hints at a potential Russia-Ukraine ceasefire. During a press conference with U.K. Prime Minister Keir Starmer on Thursday, Trump said that he hopes “we’re going to have some good news for you coming up.”

Another record for the S&P 500. The three major U.S. indexes closed higher Thursday. The small-cap Russell 2000 also rose to hit an all-time high. Asia-Pacific markets mostly fell Friday. The Nikkei 225 declined after the Bank of Japan expectedly held interest rates steady.

[PRO] Bank stocks could climb on Fed cut. That’s according to Wells Fargo, which said that their data showed banks tend to dip after a first Fed cut, but then rally an average of 21% from that point — provided certain conditions are met.