Intel to Cut Out its Network and Edge Group in Big AI Shift
Intel is moving faster in its big change by cutting out its Network and Edge Group (NEX) to stand on its own. This comes right after they said they lost $2.9 billion in one quarter and cut 15% of their team. This shows a bold new step in CEO Lip-Bu Tan's plan to make the company's main work more simple.
The Plan for a Stand-Alone NEX
A note to buyers says Intel plans to find key buyers for NEX but will still put its own money in. This is like when it sold part of its Altera unit. The NEX unit, which works on network chips and talks tech, will now run by itself.
Sachin Katti, the boss of the group, said, "With Intel's help, this new company can push its customer plans and products by making new things faster and putting money into new areas."
Cutting Out Non-Key Work
This cut is part of Intel's bigger move to leave any work that's not vital to its main chip and AI goals. In a talk about earnings, CEO Tan called Intel "too spread out and not sharp,” and said they now have 75,000 workers and are moving away from their big plans to make more chips.
Risks to Making Tech
This change hits even Intel's top making tech. Tan said that if they don't get a big outside buyer, they might cancel their new 14A chip tech, which would give a win to rivals TSMC and Samsung.
Focus on Main Chips and Servers Stays
While they cut some areas, Intel's main chip plans are still set. The Panther Lake chip, built on the 18A tech and really good at AI, is set to come out in late 2025. In the server area, they keep working on Granite Rapids, even though AMD's EPYC chips are tough rivals.
By making NEX its own thing, Intel wants to focus better on these key chip areas and make more money.
Market Thoughts and What May Come
This move, along with an 8% fall in Intel's stock after their money report, makes people wonder about how solid Intel is with money. It looks a lot like the Altera cut, but it's not sure if NEX can do well on its own while Intel faces big fights in AI and chip making. The win of this bold change all depends on how well Intel can do its AI plan and make products that can fight others.
