Will Intel's GPU-making gambit pay off?

Intel is about as ubiquitous as you can get in the enterprise technology landscape. Chances are, everybody on this planet who's interfaced with a computer has used the company's chips. That's a degree of universality enjoyed by only a handful of organizations throughout history. Yet, until very recently, the narrative around a once irreproachable institution has been dripping in corporate angst, with anxiety rising around a perceived decline.

Over the last few years, Intel's rivals have made up ground. We needn't dwell too much on Nvidia, which enjoys a de facto stranglehold on the US economy. Qualcomm is in a period of ascendency, pushing its chips into new kinds of devices like laptops. AMD is also enjoying something of a renaissance period, thanks in part to its data center dominance. Samsung has also been an ever-present in the chipmaking game.

Intel, however, has been bidding to "turn things around" for the best part of a decade. Plans have largely centered on manufacturing, including being a producer for "fabless" companies and building additional factories. Recent efforts include job cuts and reorganizations. Under fresh leadership in the form of Lip-Bu Tan, these efforts are now beginning to pay dividends, especially over the last six months. With graphics processing units (GPUs) now the hottest commodity in the AI build-out, can a pivot into this space be Intel's solution to finally exorcise its demons?

Intel's rise, fall and signs of resurgence – how did we get here?

Despite a positive history, events since the turn of the millennium have contributed to a perception that Intel has struggled to adapt to the modern world. To some extent, these views are grounded in reality – with material consequences to the company's bottom line. A sense of complacency and poor business decisions that have compounded over time, the narrative goes, has opened the door wide open to its much hungrier rivals, while executives have unfortunately been caught resting on their laurels.

"Turbulent is very appropriate," Alvin Nguyen, senior analyst at Forrester, tells ITPro, when asked how he would characterize Intel's performance as a company in the last few years. "I would say that until the past year, Intel had been struggling in terms of perception, thought leadership, and reputation."

It's easy to see why this is the dominant narrative, and the collapse in the company's stock price between 2021 and 2025 – a nearly four-times drop – illustrates how the market has perceived the company's performance. But how did we get here? One of the earliest missteps could perhaps be from the early 2000s, in a story now mythologized, that former CEO Paul Otellini turned down a deal with Apple to make iPhone processors.

You may also point to another former CEO Brian Krzanich, who in the mid-2010s held back on deploying next-generation equipment used in the extreme ultraviolet lithography (EUV) chipmaking technique in favor of multi-patterning technology. Commentators say this set the company back by half a decade.

Despite efforts to turn things around in the years that followed, including a $20 billion plan in 2021 to develop a foundry service, things did not improve, and the company continued its slide. However, following the retirement of Pat Gelsinger and appointment of its new CEO in March 2025, the company has undergone a significant internal transformation.

The firm made key executive hires in June last year, before axing 24,000 roles and cancelling factory plans the following month. Now, reports suggest that Intel will aim to buy into the success that some of its key rivals have lorded over it for years by investing in GPU production for AI data centers.

Can Intel tap into the GPU goldmine?

There's no overstating how important GPUs are in the AI buildout. The parallel processing capabilities of these chips, once used primarily in PC gaming, are primed to perform the sorts of operations and calculations essential to AI training and inference. Enterprise-grade GPUs are also highly sought after, with the likes of AMD and Nvidia dominating this space. So does the market need another player?

"Nvidia may be the leader, but they are unable to satisfy the market demand by themselves," says Nguyen. "As long as the demand for AI (and GPUs) keeps beyond capacity, Intel is not entering a "crowded" market. If there is a market correction or multiple market corrections, then this changes."

For what it's worth, Intel has been quietly improving the standard of its consumer-grade GPUs for years. The first generation of Intel Xe integrated graphics processors paved the way for a set of excellent entry-level GPUs in recent years in the form of the Alchemist and Battlemage Intel Arc Graphics GPUs you find in some of the best business notebooks.

The next generation of chips will be launched in the coming year or two under the Celestial banner, with Xe-3 integrated graphics serving entry-level machines. Nvidia, meanwhile, has been planning a scaleback in its consumer-oriented GPUs. Although the margins are less profitable than enterprise customers, is this something of a void that Intel can step into?

The next generation of chips will be launched in the coming year or two under the Celestial banner, with Xe-3 integrated graphics serving entry-level machines. Nvidia, meanwhile, has been planning a scaleback in its consumer-oriented GPUs. Although the margins are less profitable than enterprise customers, is this something of a void that Intel can step into?

"Intel is addressing both: AI-related enterprise demand provides an untapped revenue source, but the demands of AI are pulling in resources from other markets like consumer, that Intel also has an opportunity in the consumer space which they are targeting with consumer GPUs," says Nguyen.

The opportunity is certainly there. But, ultimately, it comes down to the execution. The early signs suggest that Tan is the man with the plan, with Nguyen telling ITPro that "Intel simply needs to keep doing what they are doing".

"They have focused on changing their corporate culture, became leaner, and became more customer focused," he explains. "They have had some clear wins in terms of their CPUs (specifically laptop CPUs) and announced big partnerships (US Government, Nvidia) that have changed perception about them [positively].

"Shipments and revenue were not as bad as the previous perception painted, so focusing on putting out products customers want, addressing issues instead of letting them stymie them for years, and making high-visibility partnerships that provide positive benefits will help grow positive perception."

Intel is on the right track, as far as Nguyen is concerned. Under Tan's leadership, the firm’s share price has surged from under $19 per share to highs of over $45. Although its previous turnaround efforts have been ineffective, seizing the opportunity to build industrial-grade GPUs might just be the boon that Intel needs to prove that its woes are firmly in the past and it can go toe-to-toe with the new kids on the block.