There are three main reasons why I’m bullish on Intel.CEO Pat Gelsinger’s leadership, the company’s strong ecosystem, and Intel’s
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An ambitious foundry business — perhaps the most important driver of Intel’s future has found the perfect time.
Open AI CEO Sam Altman recently attracted widespread attention when he appealed for up to $7 trillion to develop silicon chip manufacturing capacity that could power artificial intelligence. The unprecedented scale of this vision, representing more than 20% of the United States’ GDP, captivated the world’s imagination. The man who brought AI to the masses said the chip industry currently lacks what it needs to support the development of fabs, data centers and infrastructure.
At first, Altman’s $7 trillion price tag seemed ridiculous to me, given its size alone, but the more I thought about it, the more I realized that chips 10, 100, even 1,000 times more powerful… We now know that building a requires investment. By the end of this decade. That would require a huge investment, and while it’s provocative that Altman would want to go it alone, it’s probably more interesting to consider which partners Altman would like to bring in.
Chip manufacturers for the West
While Intel aims to become a chipmaker for the West, Altman wants to reimagine the global supply chain and industry for AI chips. Perhaps it’s time to ask whether it’s just a coincidence that Mr. Altman and Mr. Microsoft did the same thing.
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CEO Satya Nadella, U.S. Secretary of Commerce Gina Raimondo, and many global semiconductor business leaders including Arm Holdings.
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and other companies will gather at Intel’s Foundry event in San Jose, Calif., on Wednesday.
Intel plans to provide a series of important updates to its foundry strategy. Intel’s foundry business has been one of the biggest bright spots over the past few quarters, including a 63% increase in Q4 fiscal year, especially given Taiwan Semiconductor Manufacturing Company’s performance. It feels like an undervalued asset in your portfolio. .
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Operating profit margin is approximately 40%.
There’s a lot of focus on whether Intel can gain traction with its own AI graphics processing units and silicon.This means that many companies, including his giant Nvidia,
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and Qualcomm
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It’s likely that it will partner with Intel for packaging and wafer production capacity, but it doesn’t seem to be getting much attention.
read: Intel’s stock value doesn’t even come close to its competitors
My take: This is no coincidence; based on the sheer scale of AI, expanded production capacity and advanced minting capabilities are desperately needed in the US and Western regions such as Europe and Israel. For those who haven’t been following closely, consider this week to be Intel’s coming out party.
I recently spoke with Gelsinger ahead of Wednesday’s Intel event. Although he did not directly comment on what Altman or Raimondo would talk about, Intel’s CEO did note the incredible scale of AI and the orders of magnitude of performance and power management that will be needed over the next decade. To me, it’s clear that there is a great opportunity here for Intel, government policymakers, and Altman to work together to meet his AI semiconductor needs. Intel is a willing and ideal partner.
The technology industry, particularly the semiconductor industry and U.S. policy leaders, see tremendous value in a powerful U.S.-based foundry of cutting-edge and AI chips. Intel is the only company that has actively worked to do this for the West. While Taiwan Semiconductor certainly has a big role to play, building AI chip capabilities in the future is all about Intel right now.
Daniel Newman is CEO and Principal Analyst of The Futurum Group, which provides or provides research, analysis, advice, or consulting to Intel, ServiceNow, NVIDIA, Microsoft, Amazon, IBM, Oracle, and other technology companies. It’s a list. He does not hold any position at him, the company, or any of the other companies cited. Follow Newman on X@danielnewmanUV.
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