Intel custom ASIC revenue nears $1bn annual run rate
Updated
Updated · The Motley Fool · May 7
Intel custom ASIC revenue nears $1bn annual run rate
13 articles · Updated · The Motley Fool · May 7
First-quarter custom ASIC revenue almost doubled year on year and rose 30% sequentially, as hyperscalers and AI companies increased demand for inference-focused chips.
Intel said the shift from AI training to inference is also lifting demand for Xeon server CPUs, with Google signing a multiyear ASIC and CPU deal and Nvidia using Xeon in Rubin systems.
Deloitte estimates inference will consume two-thirds of AI computing power in 2026, supporting Intel's push into a market led by Broadcom and helping its broader turnaround after flat 2025 revenue.
Intel is betting big on AI inference. Can its strategy truly challenge the market's current titans?
As AI's energy hunger threatens global power grids, can chip innovation prevent a full-blown crisis?
Intel’s $1B ASIC Growth and Tesla 14A Partnership Signal Foundry Strategy Pivot
Overview
Intel started 2026 strong with better-than-expected Q1 results driven by a $5.1 billion Data Center and AI segment, boosting its stock over 15%. Despite this, Intel Foundry Services (IFS) faces challenges, generating most revenue internally with minimal external customers. The breakthrough came as Tesla committed to Intel's advanced 14A process, validating its foundry ambitions and supporting Elon Musk's vision for U.S.-based chip production. Meanwhile, hyperscalers' AI infrastructure demand fuels Intel's growing ASIC business, enabled by its integrated IDM 2.0 model. However, supply chain bottlenecks, especially in advanced packaging and below-target yields at cutting-edge nodes, constrained shipments and pressured Q1 earnings, prompting cautious capital spending tied to customer commitments.