On Tuesday, Intel’s stock rose after it landed a multibillion-dollar deal with Amazon’s cloud unit to co-invest in a custom AI semiconductor.
The California-based firm’s stock climbed by 2.68% to $21.47 apiece in the closed session. However, it later declined by -0.65% to $21.33 per stock in the pre-market trading.
As part of the multibillion-dollar deal, Intel will produce custom artificial intelligence (AI) chips for Amazon Web Services (AWS), further strengthening the companies’ long-standing partnership.
According to reports, the chipmaker might also receive about $3.00 billion in US government funding to create chips for the military.
Meanwhile, the company has been transforming its struggling manufacturing division, known as the foundry, into an entirely owned subsidiary.
However, Intel is also rethinking some of its plans. The chipmaker noted that it may pause its prospect for new factories in Germany and Poland.
Also, a plant in Malaysia will be accomplished but will start operating once conditions support it.
Meanwhile, analysts disclosed that the deal lends the firm credibility as it seeks to attract new external customers. Additionally, it will assist Intel in positioning itself as a provider of custom AI silicon chips.
However, experts also revealed that despite the deal, it is not enough to reverse the company’s decline.
Sony PlayStation 6 Chip Deal Lost by Intel
AMD has outshone Intel on Sony’s PlayStation (PS) 6 contract amid profits and downward compatibility worries.
In addition to the profit disagreement, backward compatibility was a critical concern. Sony has utilized AMD hardware for the PS4 and 5 and will likely continue with AMD for the looming PS5 Pro.
Reports noted that if Sony had selected Intel to design the chip, compatibility between the consoles could have been at risk.
Unlike personal computers, where AMD and Intel components are typically interchangeable, consoles depend on hardware and software setups. Switching from AMD to Intel could have led to performance problems, especially with games developed for previous console generations.
