Report: Intel’s Breakthrough AI Chip to Compete with NVIDIA Unlikely Before 2027

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Intel, under its new CEO, Lip-Bu Tan, is poised to undertake significant workforce reductions as part of a strategic overhaul aimed at solidifying its presence in both the foundry and artificial intelligence sectors. Tan is the first permanent CEO since Patrick Gelsinger stepped down in December. Recent reports indicate that he will pursue Gelsinger’s strategy, emphasizing the importance of the foundry business. Amid speculation about a potential spinoff of Intel’s foundry operations, Tan has reassured employees of his commitment to positioning Intel as a top global foundry provider.

Strategic Goals for Foundry Excellence and AI Development

According to reports from Reuters, following a letter to employees, Tan addressed his vision in a company town hall meeting after assuming his new role. With a solid background on the board of directors until 2024, Tan aims to enhance Intel’s competitive edge in AI and strengthen its foundry capabilities.

Insiders suggest that Tan’s immediate focus will be on refining Intel’s middle management, enhancing operational agility, and reducing costs. This comes after Intel implemented substantial layoffs in 2024 to stabilize finances amid significant quarterly losses. Despite past declines in stock value due to layoffs, Intel’s shares have surged by nearly 25% since Tan’s leadership began, reflecting growing investor confidence in his potential to revitalize the company.

In his introductory message to employees, Tan emphasized the importance of transforming Intel into a premier foundry entity. At the town hall, he reiterated this commitment, highlighting the increasing demand for contract manufacturing spurred by the AI boom and U. S.government initiatives aimed at boosting domestic chip production. The CHIPS and Science Act, recently passed, has provided Intel with billions, fueling optimism for a revived U. S.manufacturing sector.

While Tan plans to bolster the foundry sector and rekindle the AI initiative, sources have indicated that immediate layoffs are necessary, especially considering that the development of AI chips will require several years. Intel is not expected to introduce its first AI chip until at least 2027.

Furthermore, Tan reportedly holds critical views on some of Gelsinger’s strategies. Notably, he has expressed concerns regarding a cumbersome management structure that has hindered Intel’s capacity to meet customer demands effectively.

A crucial element of Tan’s strategy will involve attracting new customers to the foundry business. Currently, Intel is advancing its 18A chip manufacturing process. Success in launching this process could bring Intel to a technological parity with its principal competitor, Taiwan’s TSMC. Following Tan’s leadership announcement, Intel’s stock has appreciated by 7.6%, contributing to its ongoing market rally.

For further information and updates, refer to the complete article by Reuters.Source & Images