Intel, the world's largest computer chip maker, has invested in Dublin's Iona Technologies, a software maker. The Irish firm would not disclose the size of the investment, but said it was "a multimillion dollar" deal.

Sources suggested the transaction involved some 200,000 Iona shares, worth about $4.1 million (€3.8 million) in trading yesterday. Last night, shares in the company closed up 5.7 per cent at $18.50 (€17.36).

The US company made the cash injection through the Intel 64 fund, a $250 million equity vehicle that invests in emerging technologies for next-generation servers and workstations using Intel's planned "IA64" 64-bit chip. Intel co-ordinates the fund but its investors include several global high-technology companies such as Compaq, Dell, Hewlett-Packard and NEC.

Iona executives greeted the investment with delight, saying that its significance lay in new relationship between the two companies and characterising the move as an endorsement of Iona's products.

"The investment capital will be used to help fund an expansion in our marketing and research & development efforts, including our IA64 porting work," said Dr Chris Horn, Iona's chairman and chief executive.

The company said the investment would support the development of updated versions of its "iPortal Suite" product family for Intel's upcoming 64 bit products. Intel has said these new chips could have a major impact on computer use.

Iona develops "middleware" - software that allows different programmes to work together. The company said iPortal Suite products would address problems in a specific class of e-business applications commonly referred to as enterprise portals.