Intel lands Amazon as client for custom AI chips, a major win for its foundry business

CEO Pat Gelsinger outlined steps that Intel would take to revive itself, after it reported disastrous second-quarter earnings

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Intel CEO Pat Gelsinger delivers a speech at the Computex forum in Taiwan in June. Photo: Reuters

Published: 10:02am, 17 Sep 2024Updated: 3:37pm, 25 Sep 2024

Intel’s foundry, or contract manufacturing business, has signed up Amazon’s cloud services unit as a customer for making custom artificial intelligence chips, the companies said on Monday, a deal that gives the chip maker a vote of confidence.

Intel’s shares rose roughly 8 per cent in extended trading after CEO Pat Gelsinger released a memo to employees announcing Intel had secured the Amazon unit as be a multibillion-dollar customer, paying Santa Clara, California-based Intel for design services and manufacturing. The memo also outlined Intel’s planned cost cuts.

Amazon Web Services (AWS) already designs several chips for use in its data centres and has hired Intel to package at least one version. Intel will produce an “artificial intelligence fabric chip” for AWS and use the chip maker’s 18A process, the most advanced version available for outside customers, the companies said.

Intel said it expects to make additional designs from Amazon on the company’s forthcoming 18AP and 14A manufacturing processes.

An Amazon Web Services office in Herndon, Virginia, US. Photo: Bloomberg

The memo also outlined a number of steps Intel would take to revive itself. Last month, it reported disastrous second-quarter earnings.