Graphics chip designer Nvidia Corp said it will begin designing central processors for personal computers, pushing back against growing pressure from Intel and Advanced Micro Devices.
Nvidia shares rose 7.7 percent on the Nasdaq after the announcement.
Nvidia said the processors will be integrated on the same chip as its graphic processor. The company, which is developing the product under the code name Project Denver, said it had obtained the rights to develop the CPU using ARM Holdings expands into Nvidia territory with its latest chips, which closely integrate central and graphics processing.
Nvidia has said consumers want constantly improved graphics and that demand for its higher-end chips would remain healthy. It has also been diversifying into the chip designs for smartphones and tablets.
Separately, Microsoft Corp said on Wednesday it will introduce a version of its Windows operating system compatible with chips designed by ARM Holdings.
(Reporting by Gabriel Madway and Noel Randewich, additional reporting by Liana B. Baker; Editing by Steve Orlofsky)