After preparing its networking and edge (NEX) assets for sale, Intel has decided to retain them. This decision follows a thorough review of its strategy, leading to a pivot in plans. An Intel spokesperson mentioned that keeping NEX in-house would enhance integration between silicon, software, and systems, fortifying customer offerings in AI, data centers, and edge computing.
Initially, Intel considered selling NEX as part of a cost-cutting strategy driven by its CEO, Lip-Bu Tan. The unit includes a range of products like CPUs, GPUs, and networking equipment aimed at enterprise, data center, and telecom markets. Early reports hinted at Intel considering external investment for NEX, creating ripples within the organization and its workforce.
The company’s decision to hold onto NEX seems to have been influenced by numerous changes. Notably, SoftBank emerged as a significant shareholder, investing $2 billion for a substantial stake. Additionally, Intel sold a 10% stake to the U.S. government, securing $8.9 billion. Further, Nvidia acquired $5 billion worth of shares as part of a new partnership. This influx of investments, coupled with potential strategic realignments, likely influenced Intel’s decision.
This inward investment introduces new stakeholders, making it prudent to reassess asset sale strategies. These stakeholders bring diverse visions, possibly leading to shifts in how Intel is managed. The decision to retain NEX reflects the company’s agility in responding to evolving market dynamics, thereby aiming for tighter product integration and comprehensive customer solutions.
