What's Going On With Intel Stock Friday?

Intel Corp's INTC CEO, Pat Gelsinger, announced that the company will not be spinning off its contract chip manufacturing division. This unit, now named Intel Foundry Services (IFS), is set to operate as a separate business within Intel. 

It will start reporting its financials in the second quarter of the following year, Reuters reports. 

Unlike its Mobileye Global Inc MBLY autonomous driving business and its programmable chip unit's upcoming separation, Intel has no plans to make IFS an independent entity.

Gelsinger explained that the internal foundry model is the most suitable approach for Intel in the current market environment. 

Also Read: Intel's New AI Chip Lineup Set to Revitalize Growth, Challenging Nvidia and AMD in Tech Race

He highlighted that Intel functions as two distinct entities: a chip design business and a factory unit. 

This structure aims to assure IFS customers that Intel can be a reliable supplier of manufacturing capacity.

The integrated operation of these units offers significant benefits, mainly since Intel currently utilizes most of the factory capacity. 

Gelsinger made these remarks at an event in New York focused on PC chips enhanced with artificial intelligence features.

He also touched upon the future of AI applications, noting the impracticality of running them from distant data centers due to high costs. 

Specifically, he mentioned that it would be too expensive for companies like Microsoft Corp MSFT to run these workloads in real-time on a billion Windows devices through Azure. 

Gelsinger suggested that to make this feasible, Microsoft would need to reduce the data transfer between its cloud data centers and PCs significantly by a factor of 100.

Price Action: INTC shares are trading higher by 1.79% at $45.99 premarket on the last check Friday.

Also Read: ChatGPT Parent OpenAI Aims At Budget-Friendly AI Innovations To Bring Down Costs

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.