Intel Corp (NASDAQ: INTC) chief executive Lip-Bu Tan reportedly conceded in a recent Q&A session with employees that it’s too late for the semiconductor firm to catch up to Nvidia in AI.
“On training, I think it is too late for us,” – Tan noted, adding INTC doesn’t even have a spot on the list of “top 10 semi companies” in the world in 2025.
At the time of writing, Intel stock is down some 15% versus its year-to-date high in mid-February.
Intel stock is not out of the AI race
According to Tan’s remarks leaked via OregonTech, Intel is no longer chasing Nvidia in the data centre race as the battle has already been lost.
Instead, the chip firm is now turning its focus to edge AI. INTC sees it as a more attainable frontier – especially as demand grows for AI-enabled PCs, industrial sensors, and embedded systems.
Tan also highlighted agentic AI, systems that act autonomously without constant human input, as a key growth area. This emerging field could reshape how devices interact with users, from smart assistants to autonomous robotics.
Intel plans to invest in talent and infrastructure to support this shift, with Tan teasing upcoming high-level hires: “Stay tuned. A few more people are coming on board.”
Note that INTC shares are currently down more than 35% versus their 52-week high.
INTC shares to benefit from cost cuts
Intel’s manufacturing struggles have compounded its AI shortcomings. Once proud of its vertical integration, the company now outsources roughly 30% of its chip production to TSMC.
Its flagship 18A node, once touted as a comeback vehicle, is now being reconsidered in favor of the more promising 14A process. Analysts warn that billions in capital expenditures may be written off if Intel shelves external 18A volumes.
Tan’s leadership marks a departure from his predecessor’s expansive IDM 2.0 strategy.
Instead of competing on all fronts, Tan is streamlining operations, cutting costs, and laying off thousands globally. The goal is to focus on what Intel can do well, starting with AI at the edge, not the cloud.
For now, though, Wall Street rates Intel shares at “hold” only.
Intel needs time to regain momentum
Despite the bleak outlook, Tan remains cautiously optimistic. He’s called Intel’s turnaround a “marathon,” not a sprint, and emphasized the need for cultural transformation.
“We need to be humble,” he told employees, urging the company to listen more closely to market demands.
Whether Intel can regain its footing remains uncertain. But one thing is clear: the company is no longer pretending to lead the AI race. Instead, it’s recalibrating – hoping that by shifting its focus and shedding legacy baggage, it can carve out a meaningful role in the next chapter of computing.
That said, Intel likely has a long road ahead, which is why analysts’ mean target of $21.50 on INTC stock indicates potential downside of nearly 9.0% from here.
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