“Intel is where good reputations go to die,” the veteran Silicon Valley investor, Michael Marks, as soon as stated. Based within the Sixties in Santa Clara, California, it was the basic tech manufacturing story of rags to riches after which drift—its expertise enterprise challenged by Nvidia, AMD, and Arm. AI gave the impression to be yet one more insurmountable hurdle for a corporation constructed for an period when private computer systems nonetheless appeared fairly neat.
On Friday, Intel’s shares hit a document excessive after saying income forecasts described as “blockbuster”. New prospects for its AI-chips, together with Tesla, and June quarter income estimates of $14.8bn noticed its share value leap 24%. The inventory is now up 120% this yr.
The AI increase has discovered one other darling. Removed from faltering, Lip-Bu Tan, who grew to become Chief Government of Intel in March 2025, is flourishing. Buyers are grateful.
Greg Ernst is Intel’s Chief Income Officer. Chatting with Fortune at Cellular World Congress in Barcelona final month, he stated that the technique put in place then was now working, regardless of preliminary skepticism from some traders (Tan made it clear when he took over that laboring Intel confronted powerful challenges).
“All of a sudden, the demand for CPUs has gone through the roof because all of these models need to communicate with each other. And what is the CPU really great at? It’s good at orchestration and managing the communication and tracking the data that’s going back and forth between these models.” Demand is so excessive that offer is struggling to maintain tempo.
Added to the market alternative is the second leg of the technique—deep partnerships.
“We decided we’re going to enter some deep partnerships and then we would get the option to issue stock,” Ernst stated. “As you can imagine, that could go either way for a company, because you’re diluting existing shareholders by issuing new stock. But our thesis was: if there’s true technical partnership, investors would be inspired by it and they would instantly see the value.”
“So, we had a short list. Softbank was one. Nvidia was one. The US government at the time was not a plan—that came together quickly later.”
The ultimate a part of Ernst’s reply hides controversy. Donald Trump initially demanded Tan resign attributable to his early-career hyperlinks to the Chinese language semiconductor business (Tan, from Malaysia, was an investor). A gathering between the President, Howard Lutnick, the commerce secretary, and Tan adopted, and the ever-mercurial Trump introduced that Tan had an “amazing story”. In August it was introduced that the federal authorities would take a ten% stake in Intel for $8.9bn, a valuation that has leapt to $36bn.
“Their investment has been great,” Ernst stated. “They have been very hands off. We do give them updates on our progress. Another piece for us is that we have a lot of great customers in China. So, we are constantly also being transparent with the companies in China, the Chinese government, and [about] what that investment means in the US. We’re an American company.”
I requested if there has any been any stress from the US authorities to divest pursuits in China. “No, there has been none.”
In 2007, Intel turned down the prospect to be the primary supplier of chips for a brand new cell phone which was about to enter the market. “I couldn’t see it,” Intel CEO on the time, Paul Otellini, stated later. Intel could have missed the prospect to be the technological companion of the Apple iPhone. Tan doesn’t need to make the identical mistake with agentic AI.
