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Intel Secures Amazon as Major Client for AI Chips: A Bold Recovery Strategy Following Disastrous Q2 Earnings
Intel secures Amazon as a customer for bespoke AI chips, marking a significant victory for its manufacturing sector.
CEO Pat Gelsinger detailed plans for Intel's rejuvenation following its poor financial performance in the second quarter.
Shares in Intel surged by approximately 8% in after-hours trading following a memo from CEO Pat Gelsinger to staff, disclosing that Intel had landed a deal with an Amazon subsidiary worth billions of dollars. The Amazon unit will be paying Intel, which is based in Santa Clara, California, for its design and production services. Gelsinger's memo also detailed the company's intended expense reductions.
Amazon Web Services (AWS) has been developing a variety of chips for utilization in its data centers, and has brought Intel on board to assemble a version. Intel will create an "artificial intelligence fabric chip" for AWS, employing the chip manufacturer's 18A process, which is the most sophisticated version accessible to external clients, according to both companies.
Intel announced its anticipation to create more designs for Amazon using the company's upcoming 18AP and 14A production methods.
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