Intel is attempting a broad turnaround under new CEO Lip-Bu Tan, with the company highlighting Intel’s Q1 2025 revenue of 12.7 billion as flat year-over-year, an 8% decline in Client Computing Group revenue, and an 8% increase in Data Center and AI segment revenue driven by Xeon volume. The company is pushing its Gaudi 3 Artificial Intelligence accelerators and says it is on track for volume production of its Intel 18A process technology in the second half of 2025, which will underpin future products such as Panther Lake CPUs expected in the second half of 2025. Intel is also investing in the Artificial Intelligence PC segment with its Core Ultra processors, emphasizing on-device Artificial Intelligence capabilities as part of a wider Artificial Intelligence Everywhere strategy, while targeting 17 billion in operating expenses for 2025 and rapidly scaling Intel Foundry Services.
A series of strategic moves, setbacks, and policy shocks have defined Intel’s 2025. The company has shed non core assets, including spinning off its programmable solutions group into a standalone FPGA firm in a deal that values Altera at 8.75 billion total, with Intel getting 4.4 billion for the sale after having acquired Altera in 2015 for 16.7 billion. Intel warned that granting the US government an equity stake could expose it to “additional regulations, obligations or restrictions” in foreign markets, yet soon after US President Donald Trump announced that the US government is taking a 9.9% stake in Intel to defend national interests. At the same time, Nvidia is dipping into its 56 billion bank account to acquire a 5% stake in Intel for 5 billion, and Intel will collaborate with Nvidia to design CPUs with Nvidia’s NVLink interconnect just months after backing the competing UALink standard.
Operationally, Intel is cutting deeply while trying to stabilize technology execution. Intel will reduce its workforce by 22% to 75,000 employees by the end of 2025 as Lip-Bu Tan signals “no more blank checks” and tells staff that Intel is not among the top 10 semiconductor companies. The firm has expanded its Xeon 6 line with models 6700/6500 for edge and high-performance workloads, introduced a 288-core Xeon codenamed Clearwater Forest built on 18A, and continues to develop Panther Lake, though yield issues with the 18A process have raised concerns about launch timing and PC supply chains. Intel’s Artificial Intelligence ambitions are reflected in Gaudi 3 adoption at providers such as IBM Cloud, the emergence of spinouts like Cornelis Networks and Articul8 targeting Artificial Intelligence and networking performance, and bets on on-device Artificial Intelligence PCs aligned with Microsoft’s Windows Copilot+ requirements.
Market positioning and governance dynamics remain volatile. Intel’s Q3 results showed better than expected figures and a renewed focus on core business, but also a supply shortage that will lead it to prioritize data center technology. The company has alternated between planning to spin off or sell its Network and Edge (NEX) unit and later deciding to keep the networking business after failing to secure a satisfactory deal or changing course. Federal intervention has driven discussions of a joint venture with TSMC that could reshape the x86 platform and global semiconductor supply chains, while federal bailout debates and criticism from executives have added to questions about Tan’s leadership. Despite ongoing turbulence, research cited in the article indicates that Intel is holding on to market share in both client and server segments against AMD, as enterprises weigh the implications of government ownership, Nvidia’s stake, new fabrication bets, and the evolving roadmap for edge, data center, and Artificial Intelligence hardware.
