Intel to tap startups in AI re-vamp
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Intel is looking to tap startups to re-vamp its AI products after several years of lacklustre designs.
New CEO Lip-Bu Tan is cutting more staff, but also plans to make use of his expertise in running a venture capital firm. Tan, a former CEO of Cadence Design Systems, is also chair of venture capital firm Walden International and plans to tap into the startups it funds for ideas to boost AI.
“We need to refine our AI strategy with a focus of emerging areas of interest. My experience helping successfully fund and incubate many startups in this space provides unique insights that we will leverage in these funds. Our goal will be to take an integrated system and platform view to develop full stack AI solution that enable more accuracy, power efficiency, and security for our enterprise customers. Our goal will be to enable the next wave of computing defined by reasoning models, agentic AI and physical AI.”
He and chief technology officer Sachin Katti are re-working the AI roadmap and will be talking about this externally in the next few months. Walden has backed AI chip developer SambaNova alongside Intel Capital, and the company is chaired by Tan.
“We’re working through the roadmap and weekly update with the team and then defining what is the new workload look like in terms of the CPU, GPU and AI and then driving the — some short-term and some longer-term products,” said Tan. “Shorter term, we may embrace some of the disruptive technology that is out there, and we can partner with them to bring the market faster and then meet the customer requirement,” he said.
As a VC, he has also cancelled the planned spinout of Intel Capital. As well as SambaNova, it has invested in firms such as Untether AI in Canada, NeuroBlade in Israel and AI chip designers in China and was meant to steer the roadmap for Intel. The company also has its own startup incubator, Intel Ignite, in the US, Munich, London and Israel.
“We have made the decision not to spin-off Intel Capital, but to work with the team to monetize our existing portfolio, while being more selective on new investments that support the strategy,” said Tan.
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The 18A process for Intel Foundry that is ramping up production this year is key for the AI products. This delivered revenue of $4.7bn in Q1, up 8% sequentially from shipping 7nm wafers and increased advanced packaging services. However the loss was $2.3 billion, roughly flat quarter-over-quarter and in line with expectations. Cost cutting was offset by the cost of ramping products on Intel 18A in Oregon and Arizona.
“We need to build trust with foundry customers,” said Tan. “We have a lot of important building blocks in place, including the ramp of Intel 18A in second half of 2025 to support the launch of our first Panther Lake SKU by year-end. However, I know from my years at Cadence Design that success in foundry business requires more than process technology manufacturing capabilities alone. It is first and foremost a customer service business, built on foundational principle of trust. And we need to instill customer service mindset across our foundry business. Success in foundry relies on recognizing that each customer use different design tools, methodologies, and styles. As a foundry, we need to ensure that our process technologies can be easily used by a variety of customers, each with a unique way of building their products. To do this, we are more rapidly embracing industry standard EDA tools and best design practices.
The company is aiming to bring 70% of the wafer for its next generation Nova Lake processor in-house but says TSMC continues to be a strong partner.
“One of the great strengths we have is the fact that we do have optionality when it comes to where we build our products. We build products with TSMC, Samsung and Intel,” said Michelle Johnston Holthaus, CEO of the Intel Products division and the other former co-CEO. “When you look at Nova Lake, you’ll see product both at TSMC and you’ll product internal to Intel. But when you look at the aggregate of Nova Lake, we will build more wafers on Intel process than we are on Panther Lake. So that commitment to continue to drive wafer growth with our internal foundry partners remains steadfast and there’s no change to strategy there.”
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