Recently, Intel’s share price surged 8%. This surge, however, was no coincidence, as Intel secured one of its most lucrative deals in recent years. The tech giant was able to sign AWS or Amazon Web Service as one of its customers for producing high-end custom AI semiconductor chips.
The company’s share price rose 8% after Intel CEO Pat Gelsinger released a memo to his employees stating that the company had closed Amazon, a multibillion-dollar contract for designing services and manufacturing. The memo also outlined Intel’s plans to cut costs.
It’s worth noting that Amazon Web Service is not merely a user of chips but has also designed its own specialized chips to enhance the performance of its data centers. AWS has partnered with Intel, a leading chip manufacturer, to help produce one of its custom chips. Intel will make this chip using its most advanced chip-making technology (the 18A process), designed specifically for AI-related tasks. This partnership highlights AWS’s focus on AI infrastructure, leveraging Intel’s latest chip-making innovations.
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Last month, Intel’s quarterly report came in, and it reported some bizarre numbers that created a sense of uncertainty. The memo also outlined steps Intel plans to take to increase its revenue and decrease operational costs. Gelsinger wrote in the memo, “The board and I agreed that we have a lot of work ahead to drive greater efficiency, improve our profitability, and enhance our market competitiveness.”
This is a remarkable development that will significantly increase the application and development of AI chips. Amazon, being one of the biggest companies in the world and the biggest e-commerce website, will explore new horizons of these AI chips.
