Intel's New CEO Unveils Homegrown AI Strategy to Challenge Nvidia's Dominance

After years of failed AI deals, Intel plans homegrown challenge to Nvidia

April 25 (Reuters) - One of Intel's biggest missteps over the past decade was the failure to challenge Nvidia's dominance in the fast-growing market for artificial intelligence chips. During his first earnings conference call with analysts as Intel's new CEO, Lip-Bu Tan outlined how Intel (INTC.O), opens new tab hopes to change that, but warned, "This is not a quick fix." Tan said he would comb through Intel's existing products to sharpen them for emerging trends in the AI market such as robotics and agents that can carry out tasks for human users. The undertaking will be challenging because Nvidia (NVDA.O), opens new tab no longer sells just chips - it sells entire data centers, from chips to cables to software compilers. Tan on Thursday said Intel will take a similar approach. Chief Financial Officer David Zinsner said that, in the near term, Intel won't make many more acquisitions. "Our priority will need to be, at this point, getting the balance sheet to a better place," Zinsner told Reuters in an interview. The implication is that Tan's efforts to at last put together a coherent AI strategy will be homegrown. "We are taking a holistic approach to redefine our portfolio, to optimize our products for new and emerging AI workloads," Tan said. "Our goal is to become the platform of choice for our customers. This requires us to radically evolve our design and engineering mindset and anticipate the needs of our customer well in advance." Historically, Intel's approach was to leave AI startups to do the work of developing new chips and then acquire them. Between 2016 and 2019, the company purchased a string of chip companies - Movidius, Mobileye, Nervana and Habana Labs - that it hoped would help it crack the AI market. While Mobileye retained a strong position in autonomous driving and Intel has retained a stake in the company after a spinout, the rest of the deals failed to help Intel gain traction against Nvidia. "Intel has a long history of building important new silicon developments within its own walls, so I'm not shocked to see them focus on in-house developments for AI," Bob O'Donnell, chief analyst at Technalysis Research, told Reuters. "If they can build the appropriate set of software support to help make it easy to deploy these new chips, then they have a chance -- but that is a big if." But other analysts said that Nvidia's dominant position, along with the efforts of major cloud-computing firms such as Amazon.com (AMZN.O), opens new tab and Google (GOOGL.O), opens new tab to build their own AI chips, leaves little room for Intel to break into the market. The company provided a glimpse of its overall AI strategy and will focus on chips and systems that run AI applications and edge devices, according to Hendi Susanto, a portfolio manager at Gabelli Funds, which holds Intel shares. "While these areas show promise, the scale and pace of their growth remain uncertain," Susanto said. Reporting by Arsheeya Bajwa in Bengaluru, and Max Cherney and Stephen Nellis in San Francisco; Editing by Leslie Adler Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence Max A. Cherney Thomson Reuters Max A. Cherney is a correspondent for Reuters based in San Francisco, where he reports on the semiconductor industry and artificial intelligence. He joined Reuters in 2023 and has previously worked for Barron's magazine and its sister publication, MarketWatch. Cherney graduated from Trent University with a degree in history.

Intel bets on in-house innovation to outpace NVIDIA in AI arms race

Intel Corporation's headquarters in Santa Clara, California. Intel is going back to the drawing board -- and its own labs -- as it gears up for a high-stakes showdown with archrival NVIDIA. After years of faltered acquisitions, the chipmaker has decided to shelve its strategy in favor of building next-gen AI processors in-house to regain footing in the fast-growing market it once led. During his first earnings call as CEO, Lip-Bu Tan clarified that the turnaround won't be immediate. "This is not a quick fix," he told analysts, outlining Intel's plans to refocus on existing products to better serve emerging AI trends, including robotics and intelligent agents that carry out tasks on behalf of users.

New Intel CEO is looking 'for partnership with the industry leader to build purpose-built silicon' for AI, but is he talking about making chips with Nvidia or for OpenAI?

Lip-Bu Tan also says he hooked up with TSMC to talk about a possible collab'. Intel's new CEO Lip-Bu Tan conducted his very first earnings call with the usual roll call of investors and banking bigwigs yesterday. Along with promising to bash the company into shape, including "flattening" the management structure and requiring everyone to turn up to the office four days a week, Tan tantalisingly revealed his aspiration for "partnership with the industry leader" in AI. More specifically, on Intel's plans for AI hardware and the role of x86 chips, Tan said, "We're going to look for partnership with the industry leader to build a purpose-built silicon and a software to optimize for that platform." So, the context is unambiguously hardware. But it's not totally clear which "leader" Tan is referring to. Few would argue that the industry leader in AI hardware is Nvidia with its latest Blackwell architecture. In which case, Tan could be hoping to get Intel chips into Nvidia's full-solution rack machines for processing AI, perhaps as an alternative to the Arm-based CPUs in Nvidia's latest DGX machines. On the other hand, maybe Tan means the "leader" in terms of AI models, which you might argue is OpenAI, even if OpenAI's lead in terms of LLM technology is more ambiguous than Nvidia's dominance in GPUs for AI processing. And that could mean custom AI chips for OpenAI. Either way, Tan conceded that it would take time to deliver on that aspiration. "We are taking a holistic approach to redefine our portfolio to optimize our products for new and emerging AI workloads. We are making necessary adjustments to our product roadmap so that we are positioned to make the best in class products while staying laser focused on execution and ensuring on time delivery. However, I want to emphasize that this is not a quick fix here. These changes will take time." Incidentally, Tan also revealed that he had spoken with TSMC's Morris Chang and Che Chia (C.C.) Wei, the former being TSMC's founder, the latter its current CEO. "Morris and C.C. are very longtime friends of mine. And we also met recently, trying to find areas we can collaborate, so that we can create a win-win situation." Does that refer to numerous reports of a joint venture between Intel and TSMC, with the latter possibly taking control of Intel's chip-production fabs? That's the $64 billion question. Meanwhile, Tan seems to be taking a tough stance on Intel itself. We reported earlier this week on mooted plans to slash 20% of Intel's workforce. Tan didn't specifically announce that measure, but he did hint that cuts would need to be made. "Organizational complexity and bureaucracies have been suffocating the innovation and agility we need to win. It takes too long for decisions to get made," Tan said, adding, "We will significantly reduce the number of layers that get in their way. As a first step, I have flattened the structure of my leadership team." Tan also wants Intel workers back in the office. "We are mandating a four day per week return-to-office policy, effective Q3 2025. I know firsthand the power of teamwork, and this action is necessary to re-instill a more collaborative working environment." Ultimately, nothing unambiguously new in terms of products or fab customers was detailed on the call. Intel reaffirmed its commitment to launch its next-gen Panther Lake CPU on its critical 18A node later this year. But Lip-Bu Tan didn't announce any new customers for Intel Foundry and didn't provide any specifics at all when it comes to his mooted plans to take advantage of the burgeoning AI revolution, aside from essentially saying the company is well-positioned to flog AI-enabled PCs. As has been the case for several years now, Intel has much to prove. And the wait for clear indications of a return to form continues.

After years of failed AI deals, Intel plans homegrown challenge to Nvidia

Intel aims to challenge Nvidia's AI chip dominance with a homegrown, holistic strategy under new CEO Lip-Bu Tan. Emphasising product refinement and full-system offerings, Intel will shift from acquisitions to in-house innovation, though analysts warn breaking into the market remains a steep, uncertain climb.One of Intel's biggest missteps over the past decade was the failure to challenge Nvidia's dominance in the fast-growing market for artificial intelligence chips. During his first earnings conference call with analysts as Intel's new CEO, Lip-Bu Tan outlined how Intel hopes to change that, but warned, "This is not a quick fix." Tan said he would comb through Intel's existing products to sharpen them for emerging trends in the AI market such as robotics and agents that can carry out tasks for human users. The undertaking will be challenging because Nvidia no longer sells just chips - it sells entire data centers, from chips to cables to software compilers. Tan on Thursday said Intel will take a similar approach. Chief Financial Officer David Zinsner said that, in the near term, Intel won't make many more acquisitions. "Our priority will need to be, at this point, getting the balance sheet to a better place," Zinsner told Reuters in an interview. The implication is that Tan's efforts to at last put together a coherent AI strategy will be homegrown. "We are taking a holistic approach to redefine our portfolio, to optimize our products for new and emerging AI workloads," Tan said. "Our goal is to become the platform of choice for our customers. This requires us to radically evolve our design and engineering mindset and anticipate the needs of our customer well in advance." Historically, Intel's approach was to leave AI startups to do the work of developing new chips and then acquire them. Between 2016 and 2019, the company purchased a string of chip companies - Movidius, Mobileye, Nervana and Habana Labs - that it hoped would help it crack the AI market. While Mobileye retained a strong position in autonomous driving and Intel has retained a stake in the company after a spinout, the rest of the deals failed to help Intel gain traction against Nvidia. "Intel has a long history of building important new silicon developments within its own walls, so I'm not shocked to see them focus on in-house developments for AI," Bob O'Donnell, chief analyst at Technalysis Research, told Reuters. "If they can build the appropriate set of software support to help make it easy to deploy these new chips, then they have a chance-but that is a big if." But other analysts said that Nvidia's dominant position, along with the efforts of major cloud-computing firms such as Amazon.com and Google to build their own AI chips, leaves little room for Intel to break into the market. The company provided a glimpse of its overall AI strategy and will focus on chips and systems that run AI applications and edge devices, according to Hendi Susanto, a portfolio manager at Gabelli Funds, which holds Intel shares. "While these areas show promise, the scale and pace of their growth remain uncertain," Susanto said.