Intel posts 2% drop in revenue as it’s yet to gain from AI

Intel has reported 2 percent drop in its revenue in 2024 to $53.1 billion as it’s yet to prepare for the AI-related business opportunities.

Intel 4th Gen Xeon Scalable Processors
Intel 4th Gen Xeon Scalable Processors

The financial performance shows that Intel, which removed CEO Pat Gelsinger recently, did not meet demands from the rapidly growing Artificial Intelligence industry.

Intel Co-interim CEO Michelle Johnston Holthaus said Intel was shelving its forthcoming graphics processing unit (GPU) design called Falcon Shores, leaving it with no major new products for AI customers. The company said it planned to use Falcon Shores as an internal test chip and focus on future data center AI products, Reuters news report said.

Intel in 2024

Intel’s Client Computing Group (CCG) revenue was $30.3 billion (up 4 percent). Intel’s Data Center and AI (DCAI) revenue was $12.8 billion (up 1 percent). Intel’s Network and Edge (NEX) revenue was $5.8 billion (up 1 percent). Intel’s Foundry revenue was $17.5 billion (down 7 percent). Other revenue was $3.8 billion (down 32 percent)

Intel in Q4 2024

Intel’s revenue in Q4 2024 fell 7 percent to $14.3 billion.

Intel’s revenue from Client Computing Group was $8 billion (down 9 percent). Intel’s revenue from Data Center and AI was $3.4 billion (down 3 percent). Intel’s revenue from Network and Edge (NEX) was $1.6 billion (up 10 percent). Intel’s revenue from Foundry was $4.5 billion (down 13 percent) and Others was $1.0 billion (down 20 percent).

Intel’s AI

Intel has established itself as a dominant player in the AI-driven computing space, with its CPUs powering a significant portion of PCs and data centers, Michelle Holthaus, Interim Co-Chief Executive Officer of Intel, said during an analyst call.

The company maintains a strong market position in client computing, particularly with the success of Core Ultra across Meteor Lake, Arrow Lake, and Lunar Lake, reinforcing its leadership in AI PC CPUs. With over 100 million cumulative AI PC systems projected by 2025, Intel continues to innovate at scale, as demonstrated by its enterprise AI CPU advancements showcased at CES. Its extensive ecosystem partnerships with IT departments and ISVs further enhance its competitive edge, particularly as enterprises migrate to Windows 11.

Looking ahead, Intel plans to launch Panther Lake, its lead product on Intel 18A, in the latter half of 2025, followed by Nova Lake in 2026. These advancements will strengthen Intel’s competitive position with improved performance, cost efficiency, and margins.

In the data center sector, Intel is focusing on closing the competitive gap with Xeon, ramping Granite Rapids and preparing to launch Clearwater Forest, its first Intel 18A server product, in early 2025. With a majority of global data center workloads running on Intel silicon, the company is leveraging its strong ecosystem to stabilize market share and expand its x86 partnerships for semi-custom and custom products.

In AI data centers, Intel holds a leading position in CPU-based AI inference but aims to increase its cloud-based AI presence. The company has learned valuable lessons from Gaudi and is refocusing its resources to enhance efficiency and cost-effectiveness. Intel has decided to use Falcon Shores as an internal test chip while shifting its attention to Jaguar Shores for rack-scale AI solutions. The overarching strategy is to optimize performance and lower computing costs, ensuring Intel remains a key player in the evolving AI business.

Baburajan Kizhakedath

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