By Olesya Dmitracova, CNN

(CNN) — Nvidia said on Thursday that it would buy $5 billion worth of Intel’s common stock, becoming another major shareholder in the beleaguered company just weeks after the US government took a roughly 10% stake.

The tech giant, which makes artificial intelligence chips, will pay $23.28 per share, it said in a joint press release. The purchase will give Nvidia around 4% or more of Intel after new shares are issued to complete the deal, Reuters reported.

Last month, US President Donald Trump and Intel announced that the government was making an $8.9 billion investment in Intel’s common stock, calling it “a Great American Company that has an even more incredible future.” “This is a great Deal for America and, also, a great Deal for INTEL,” Trump wrote on Truth Social at the time.

The investment is part of the Trump administration’s efforts to boost semiconductor manufacturing in the United States and cement America’s position as a leader in the global chipmaking industry.

Trump has said that he plans to impose 100% tariffs on imported semiconductors, excluding suppliers that have committed to building products in the United States.

Although Intel was once one of America’s most important tech companies, it has fallen behind rivals after failing to anticipate successive technology waves. Lip-Bu Tan, who took over as CEO in March, has been attempting to turn the company around.

The two tech companies also announced that they would jointly develop custom data center and personal computing products.

Analysts at Wedbush Securities said the overall agreement was “a game-changer deal for Intel as it now brings them front and center into the AI game.”

“Today’s announcement further strengthens the US lead in the AI arms race against China as Intel now goes from a laggard to a catalyst,” they wrote in a note.

Thursday’s announcement sent Nvidia’s (NVDA) shares soaring in premarket trading. They pared those gains later in the day.

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CNN’s Clare Duffy and Lisa Eadicicco contributed reporting.