Intel Partners with Amazon for Custom AI Chip

Intel Corp has struck a significant deal with Amazon Web Services (AWS) to co-invest in a custom AI chip for computing, known as a fabric chip. This partnership is part of a multiyear, multibillion-dollar framework that will utilise Intel's 18A process, an advanced chipmaking technology. The collaboration is a critical step in Intel's transformation into a foundry, helping the company compete in the AI computing market, which is currently dominated by Nvidia.

Delays in Intel’s Factories in Germany and Poland

Despite the success with Amazon, Intel has announced delays in its factory construction projects in Germany and Poland due to market demand. These delays could last up to two years, although Intel continues its commitment to expanding in the U.S. with chip plants in Arizona, Ohio, New Mexico, and Oregon.

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Intel Secures $3 Billion in U.S. Government Funding for Military Chips

Intel has also secured eligibility for up to $3 billion in U.S. government funding to manufacture chips for military and defence purposes. This funding is separate from the $8.5 billion in potential Chips and Science Act grants to support Intel’s U.S. chipmaking expansion, including a facility in Ohio, which is expected to become the largest chipmaking plant globally.

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Intel’s Focus on Cost-Cutting and AI Chip Production

To remain competitive, Intel has announced a $10 billion cost-saving plan that includes workforce reductions and cuts in global real estate. These efforts, combined with Intel’s focus on AI chip production, will help the company reposition itself in the fast-growing AI computing sector. The partnership with Amazon for custom AI chips, cost-cutting efforts, and U.S. expansion are all part of Intel’s larger comeback strategy.

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