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Intel (INTC, Financials) is shifting away from past acquisition bets and instead focusing on building its artificial intelligence capabilities in-house, Chief Executive Officer Lip-Bu Tan said Thursday, according to Reuters.
Speaking during his first earnings call as CEO, Tan said Intel will develop a full-stack AI offeringchips, software, and systemssimilar to the model used by Nvidia (NVDA, Financials). He cautioned that the turnaround won't be immediate, calling the process not a quick fix, Reuters reported.
Intel's pivot marks a departure from earlier efforts to grow in AI through acquisitions, including companies like Nervana, Movidius, and Habana Labs. Those deals failed to move the needle, though MobileyeIntel's autonomous driving unithas maintained a solid position following its spinoff, with Intel retaining a stake.
The focus now is on refining Intel's existing products for applications such as robotics and task-based AI agents, while also developing edge computing chips to handle AI outside traditional data centers.
According to Reuters, Chief Financial Officer David Zinsner said the company doesn't plan to pursue major acquisitions in the near future, citing balance sheet concerns.
Analysts said Intel faces an uphill climb. Nvidia is far ahead, and tech giants like Amazon (AMZN, Financials) and Google (GOOGL, Financials) are designing their own AI chips, further crowding the field.
Still, some believe Intel could carve out space if it can offer the right mix of hardware and software. If they can build strong software support around the chips, they've got a chance, analyst Bob O'Donnell told Reuters. But that's a big if.
This article first appeared on GuruFocus.