Intel is turning to artificial intelligence as a strategy to alter its current financial trajectory. The company is wagering that the central processing unit (CPU) can again become the core of computational efforts, even amidst ongoing manufacturing hurdles. CEO Lip-Bu Tan, during the Q1 2026 earnings call, noted that AI is greatly expanding the $1 trillion chip market, and Intel is ideally positioned to claim its share.

He emphasized that although GPUs have dominated the high-performance computing conversation in the recent past, recent indicators suggest a shift back to the CPU as a crucial element in the AI era. Tan highlighted how AI is transitioning from data centers to the physical world, where inference and learning workloads increasingly run on agents, robots, and edge devices.

Intel’s challenge is to develop the necessary products to meet these demands, especially given its history of delays and product cancellations in the GPU sector. The company is progressing on its Intel 14A process node, aiming to produce chips not just for itself but also for other companies. The company expects initial design commitments by late 2026, further expanding in 2027.

Intel made significant inroads with AI, as evidenced by the Xeon 6 chip becoming the host CPU for NVIDIA’s DGX Rubin NVL8. Furthermore, Intel’s long-term partnership with Google for infrastructure processing units (IPUs) exemplifies its strategic moves in AI infrastructure.

Stock market reactions to Intel’s earnings report were positive, with shares rising sharply. The hope is that the AI-focused strategy coupled with process node innovations will carry Intel through its current production struggles.