Amidst the competitive landscape of the artificial intelligence (AI) market, Intel’s progress in this space has been noted as slow yet steadily improving, according to a recent update from Deutsche Bank analyst Ross Seymore. Despite lagging behind some peers, Intel is making strides on various fronts regarding AI technology.
During an investor meeting with Intel’s VP John Pitzer, the company expressed optimism about capitalizing on the AI megatrend, albeit with a slower start compared to competitors. Intel anticipates generating over $500 million in Gaudi revenue this year within the AI generator market, recognizing that this amount is relatively small in comparison to what GPU and ASIC players are generating.
In terms of AI PC processors, Intel has set a target to ship 40 million units in 2024 with its Meteor Lake offering. Moreover, upcoming products like Lunar Lake are expected to be more AI-focused, potentially enhancing Intel’s position in the market.
Despite investor disappointment over the split of Intel’s operations into Foundry and Product segments, the duration for break-even within Foundry is seen as facilitating a transition to more profitable nodes. The company aims to achieve its 60/40% gross margin/operating margin targets by 2030, contingent on advancements in manufacturing costs, external Foundry revenue growth, and expansion in the Products/Other segment.
Overall, Intel’s transformation efforts are considered costly but necessary, with the financial benefits projected to materialize in the long term. As Intel navigates this transformative phase, the company is viewed as a show me story, where tangible improvements will need to be demonstrated to stakeholders.
