Intel struggles with challenges in the AI business – but there is hope.

With its latest revenue forecasts, Intel has indeed generated positive headlines. However, the optimistic figures mask the company's difficulties in the field of artificial intelligence. In particular, the sales of the much-touted Gaudi accelerator chips fell short of expectations, leading to a revision of the forecast, which had anticipated revenues exceeding $500 million for these chips in 2024. CEO Pat Gelsinger attributed the lower demand during an analyst call to technical adjustments and the generational shift from the second to the third chip generation. Nevertheless, the overall optimistic expectations pushed Intel's stock up by nearly 6%. However, this cannot hide the fact that the stock price has fallen by more than 50% over the year, as Intel lags behind competitors like Nvidia in the AI sector. Intel's challenges in the AI segment are not new and further highlight the failure of a clear strategic decision against rival Nvidia. Pat Gelsinger remained confident: hopes that Intel's AI chips could gain momentum following the success of Nvidia's GPUs for ChatGPT have not been entirely abandoned. However, it is evident that ambitious forecasts alone do not constitute guaranteed deals. Particularly problematic was the fact that Intel was unable to secure sufficient capacity with contract manufacturer TSMC to achieve its own goals. Both companies communicated ambitious, yet unrealized, multi-billion-dollar deals. It remains to be seen how the business with AI chips will develop. Pat Gelsinger looks forward with cautious optimism. Analysts view the situation critically. Vivek Arya of Bank of America bluntly questioned the state of Intel's business if their CPU chips are considered interchangeable and no competitive AI products are driving demand.