What just happened? Last year, Nvidia CEO Jensen Huang confirmed that the company was in talks with Intel to manufacture its future GPUs. Now, in a media event in Taipei, Taiwan, Huang claimed that early test results for an Intel-manufactured Nvidia chip based on the former's s next-gen process node have yielded good results, and both companies are "evaluating the process" on how best to move forward.

Intel CEO Pat Gelsinger also confirmed that the company has added a new customer for its Intel 3 node, but did not officially reveal the name of its client. In a statement, Gelsinger said "I am very happy that we were able to add a leading cloud, edge, and data center solutions provider as a leading-edge customer for Intel 3." End products based on the Intel 3 node are expected to start rolling out in the second half of 2023.

Intel typically uses both TSMC and Samsung foundries to manufacture its GPUs, but Huang has long talked about tying up with other foundry services to "expand (its) supply base with diversity and redundancy at every single layer." The driving force behind Nvidia's move to diversify its supplier base is the rising tensions between the U.S. and China, which has led some U.S. officials to suggest that in the event of a Chinese invasion of Taiwan, the U.S. military should bomb the TSMC facilities rather than let China get access to any cutting-edge technology.

While the tie-up between Intel and Nvidia makes sense when looked at from the geo-political perspective, it has nonetheless raised more than a few eyebrows. The two companies are direct competitors on both the CPU and GPU fronts, and many have wondered whether it makes sense for them to share information about their chip design with one another. Either way, if Nvidia does end up using Intel's foundries to manufacture its GPUs, they will most likely be built in the US.., at the latter's upcoming factory in Arizona.

Getting Nvidia's business is critical to Intel, as the company has experienced a tumultuous time over the past year. In the first quarter, the company reported its largest quarterly loss in history, with revenue down 36 percent and earnings per share down a whopping 133 percent compared to the same period last year.

Gelsinger has been scathing in his assessment of the company's troubles, telling The Wall Street Journal that the chipmaker has experienced "serious issues in terms of leadership, people, methodology, et cetera." The company's foundry business has also struggled to get customers until now, so nabbing a big client like Nvidia could be exactly what the doctor ordered.