A new front has opened up in the battle for dominance in AI chips, as Nvidia said its latest development could replace the mouse and keyboard in how people use computers.

The $5tn (£3.7tn) US semiconductor company has launched a “superchip” that puts AI capabilities into laptops and desktop computers, a move that will pit it against Intel, Apple, Qualcomm and AMD.

The RTX Spark chip will be launched this year, and will be used by computer makers including Dell, Lenovo, Asus and HP, paired with Microsoft’s Windows software, according to the Nvidia chief executive, Jensen Huang.

Speaking at the Computex conference in Taiwan, Huang said the chip would “reinvent the PC” for the AI era, after three years of collaboration between Nvidia and Microsoft.

A combination of a microprocessor and a graphics chip, developed with help from Taiwan’s MediaTek, it is designed to run AI agents locally rather than relying on cloud computing.

It will allow agents to navigate PCs autonomously, replacing humans’ traditional mouse and keyboard interactions. Because the chip is very powerful, computers will still be thin and light, the company said.

Huang said Nvidia was reimagining the PC “for the first time in 40 years”.

The company’s foray into the consumer PC industry will open up a new business line, but this will take time, analysts said. Nvidia, which dominates the booming AI semiconductor market, is pushing beyond graphics cards into integrated chips that power the whole computer.

Neil Shah, a co-founder of Counterpoint Research, compared the “RTX Spark moment” to the advent of the iPhone, ChatGPT and DeepSeek.

“The RTX Spark looks to transform the traditional app-centric PC to a real useful agentic AI personal computer which will eventually be in every home in coming years as private edge AI agents become pivotal,” he said.

The new chip and Nvidia’s Vera central processing unit demonstrate the company’s growing focus on PC and central processing unit (CPU) products. The Vera CPU is designed for AI agents and early adopters, including OpenAI, Anthropic and SpaceX.

Susannah Streeter, the chief investment strategist at Wealth Club, said: “Nvidia’s latest push into AI-powered personal computers marks a bold attempt to extend its dominance beyond datacentres and into consumers’ everyday lives. The unveiling of the RTX Spark chip reinforces Jensen Huang’s vision of PCs evolving from simple productivity tools into hyper-intelligent digital co-workers.

“While strategically significant, investors are likely to view the move as a longer-term growth opportunity rather than an immediate earnings driver. For now, Nvidia’s fortunes still depend overwhelmingly on relentless global demand for AI infrastructure and data centre computing power.”

As chip wars heat up, Intel intends to start shipping an AI chip later this year that uses cheaper memory and cooling technology than its Californian rivals Nvidia and AMD.

Intel announced a new graphics processing unit (GPU), Xe3P, codenamed Crescent Island. It is “purpose-built for this upcoming AI generation of agents”, according to Anil Nanduri, the vice-president of AI products at Intel’s Data Center Group.

Amid fears that AI will destroy vast swathes of jobs, Huang said it was “complete nonsense” that the technology would reduce demand for software engineers, arguing that it would increase hiring by making workers more productive.

“This is the promise of AI,” he said. “The number of engineers, software engineers, is actually increasing. People talk about AI reducing jobs – complete nonsense. It’s causing more software engineers to be hired.”

Meanwhile, Rene Haas, the chief executive of Arm, is in line for a pay package that would make him a billionaire if he hits targets to turn the microchip firm into the UK’s first trillion-dollar company.

Arm, which is listed in New York but has its global headquarters in Cambridge, has proposed a pay scheme including generous share awards that is worth more than $1bn in total by 2031, if Haas can hit certain “exceptional growth metrics”.