watch nowNvidia said it will invest $5 billion in Intel as part of a deal to co-develop data center and PC chips with the troubled chipmaker, which took on the U.S. government as an investor last month.Nvidia is investing its stake at a price of $23.28 a share, a release from the company said. Intel shares closed 22.8% higher to $30.57 following news of the deal.Intel posted its best day since October 1987. Nvidia shares closed 3.54% higher on Thursday."This historic collaboration tightly couples NVIDIA's AI and accelerated computing stack with Intel's CPUs and the vast x86 ecosystem -- a fusion of two world-class platforms. Together, we will expand our ecosystems and lay the foundation for the next era of computing," said Nvidia CEO Jensen Huang in a release.Nvidia now joins Softbank and the U.S. government in supporting Intel's turnaround.Intel shares, which hit their lowest in more than a decade earlier this year, rebounded after finding renewed support from the Trump administration, striking a deal for the U.S. government to invest 10% in the chipmaker in August.White House deputy press secretary Kush Desai said in a statement Thursday that the partnership was a "major milestone for American high-tech manufacturing."Read more CNBC tech newsCerebras' blockbuster IPO boosts hype for SpaceX and OpenAICerebras soars in Nasdaq debut, topping $100 billion market cap after blockbuster IPOXi tells Musk, Tim Cook and other CEOs on Trump's trip: China will 'open wider'Chinese companies are ramping up homegrown AI chips, even if Nvidia is coming backMicrosoft feared being too dependent on OpenAI, Musk-Altman trial testimony revealsSoftBank also made a $2 billion investment with Intel in August.The government put $8.9 billion into the chipmaker for 433.3 million shares. That stake is now worth $13.2 billion with shares at $30.57.A senior White House official said the administration was not involved with the Nvidia-Intel deal."What's unclear is whether this represents token cooperation intended for political purposes, or if it's the start of a wider collaboration that would more significantly benefit INTC," wrote Wolfe Research's Chris Caso in a note Thursday following the announcement.Caso said the biggest question is if Nvidia will manufacture at Intel's fabs.The investment, which is subject to regulatory approvals, does not appear to include the manufacturing of Nvidia chips with Intel's foundry.Intel will build x86 central processing units for Nvidia's AI infrastructure platforms, according to the release. On the PC front, Intel will build x86 system-on-chips using Nvidia's RTX graphics processing units that will power computers.Nvidia is in the middle of U.S. and China trade negotiations to get approval to sell less-advanced chips in China.Stock Chart IconStock chart iconIntel, YTD- CNBC's Megan Cassella contributed to this article.