Intel has announced plans to spin off its Network and Edge Group (NEX), a decision that marks a significant shift in the company’s strategic direction. This move will see Intel reduce direct competition with Nvidia in the communications chip sector, particularly after Nvidia’s successful 2019 acquisition of Mellanox—a company integral to its own networking strategy and a cornerstone in its Artificial Intelligence hardware and software platform ambitions. By extracting NEX, Intel signals a realignment away from pursuing parallel Artificial Intelligence-driven infrastructure to Nvidia, possibly reflecting the rapid changes in the semiconductor and datacenter industries.
The NEX division has developed chips for networking and communications in a manner similar to Mellanox. The group employs thousands worldwide, including about 400 in Israel, and generated roughly $?.8 billion in revenue in 2024—a modest 1% year-over-year increase, which accounted for approximately 10.9% of Intel’s total revenue that year. However, since the first quarter of 2025, Intel quietly stopped providing separate financial breakdowns for NEX, indicating its declining strategic priority within the company’s broader portfolio.
Internal communications, as reported by CRN, revealed Intel’s intention to establish NEX as a separate, independent entity solely focused on silicon solutions for communications, enterprise networking, and ethernet connectivity infrastructure. The division’s general manager, Sachin Katti, described the new standalone business as being backed by Intel but positioned to accelerate its customer-facing strategy and product development roadmap. While no definitive timeline was outlined for the spinoff, Intel stated it is seeking outside investors for the new venture, mirroring its approach with the Altera spinoff, and will remain an anchor investor to retain an interest in the group’s future growth. Intel has reaffirmed support for existing NEX customers throughout the transition.
