I’m excited about Intel for three main reasons: Chief Executive Pete Gelsinger’s leadership, the company’s strong ecosystem, and Intel’s
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The burgeoning foundry business — which may have found its perfect moment to become the most important driver of Intel’s future.
OpenAI CEO Sam Altman recently drew widespread attention when he called for up to $7 trillion to build the silicon chip manufacturing capacity that powers artificial intelligence. The unprecedented scope of this vision, equivalent to more than 20% of US GDP, captured the imagination of the world. It was he who brought AI to the masses that the chip industry currently lacks to help it develop fabs, data centers and infrastructure.
At first, Altman’s $7 trillion price tag seemed ridiculous to me based on its size alone, but the more I thought about it, the more I realized the investment needed to make chips that could scale 10x, 100x or so. will be 1000x more powerful than By the end of this decade. It’s going to be a massive investment, and while it’s provocative to think that Altman would want to go at it alone, it’s probably more interesting to think about what partners Altman might want to bring along.
Chipmaker for the West
Intel aims to be a chipmaker for the West, while Altman wants to reimagine the global supply chain and industry for AI chips. Perhaps it’s time to ask if it’s just a coincidence that Altman, Microsoft
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CEO Satya Nadella, US Commerce Secretary Gina Raimondo, and a host of global semiconductor business leaders such as Arm Holdings
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,
Broadcom
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,
Synopsys
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,
Cadence Design Systems
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,
Ances
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And others will gather at Intel’s Foundry event in San Jose, Calif., on Wednesday.
Intel will provide a significant set of updates on its Foundry strategy. While Intel’s foundry business has been one of its biggest bright spots over the past few quarters, including a 63 percent jump in its fiscal fourth quarter, it still feels like it Intel is an underappreciated asset within the portfolio – especially given that the Taiwanese semiconductor manufacturing company.
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Operates at an operating margin of ~40%.
Much attention has been focused on whether Intel can gain traction with its AI graphics processing unit and silicon. So the reality is that many companies, including giants Nvidia
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and Qualcomm
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,
Will likely partner with Intel for packaging and/or wafer capacity seems to be going somewhat unnoticed.
Read: Intel stock’s value isn’t even close to its competition.
My take: It’s far from a coincidence, and at the sheer scale of AI, scalability and advanced foundry capabilities are desperately needed in the US and Europe and other Western geographies like Israel. Consider the coming party for Intel this week, for those who haven’t been following it closely.
I recently spoke with Gelsinger ahead of Wednesday’s Intel event. While he wouldn’t comment directly on what Altman or Raimondo will discuss, the Intel CEO pointed to the incredible scale of AI and the orders of magnitude of performance and power management that the next decade will bring. I will need. To me, it’s clear that there’s a great opportunity here for Intel, government policymakers, and Altman to collaborate on meeting the need for AI semiconductors. Intel makes for both a willing and ideal partner.
The technology industry, and especially the semiconductor industry, and US policy leaders see enormous value in a robust US-based foundry for critical and AI chips. Intel is the only company that has stepped up to do this for the West. Taiwan Semiconductor certainly has a huge role to play, but to build the potential for future AI chips, this moment is all Intel.
Daniel Newman is the CEO and Chief Analyst of The Futurem Group, which provides or provides research, analysis, advice or consulting to Intel, ServiceNow, NVIDIA, Microsoft, Amazon, IBM, Oracle and other technology companies. Neither he nor the firm holds any position in any of the other companies referred to. Follow Newman on X.@danielnewmanUV.
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