Wed Sep 18 01:23:47 UTC 2024: ## Intel Splits Off AI Chip Manufacturing Arm, Shares Surge
**Santa Clara, California** – In a significant move aimed at revitalizing its struggling foundry business, Intel announced plans to separate its AI chip manufacturing subsidiary, Intel Foundry, into an independent entity. The news sent Intel shares (INTC) soaring over 6% in after-hours trading on Monday.
Intel CEO Patrick Gelsinger described the move as a “most significant transformation” for the company in over four decades, comparable to the transition from memory to microprocessor production. This move will allow Intel Foundry to raise external funds and operate with a separate board of directors, creating greater flexibility and leverage in the competitive semiconductor market.
The separation comes as Intel faces challenges in keeping up with its rivals, Nvidia and AMD, in key areas like cloud and AI. To bolster its presence in the AI space, Intel has recently partnered with Amazon Web Services to develop custom AI chip models, a collaboration that will launch next year. Additionally, the company secured $3 billion from the Biden-Harris administration for the Secure Enclave program, which will fund the manufacturing of chips for the US military.
While Intel has faced significant losses and a slump in its stock price in recent months, the company hopes that the spin-off of Intel Foundry will generate renewed momentum and attract investors. The move will also allow the company to focus on its core businesses while giving Intel Foundry the independence to thrive in the burgeoning AI chip market.
This separation marks a significant shift for Intel, highlighting the company’s commitment to adapting to the changing landscape of the technology industry. The success of this move will be closely watched as Intel seeks to regain its position as a leader in the semiconductor sector.
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