2 months ago
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Intel had one job. Deliver chips when demand explodes. Instead, they torched every bridge. When Donald Trump gave Intel nearly $9 billion and backed it as an America-first tech firm, everyone expected a full comeback.
The stock jumped 120% in five months. Investors thought orders would roll in fast. They were right. Orders came. But Intel wasn’t ready.
For months, Intel had been cutting production on older lines. So when AI companies needed processors, the company had nothing. They failed to deliver. The stock collapsed 17%, wiping out over $46 billion.
Wall Street found out the hard way. Stacy Rasgon from Bernstein said, “The stock went vertical on vibes and tweets. In theory, they should be in place to capitalize on this demand, but they’re not. What a shame.”
Intel wasted the AI wave with no plan and no chips
Intel got flooded with demand from AI data centers. They couldn’t supply the chips. Chief Executive Lip-Bu Tan admitted, “I’m disappointed we were not fully able to meet the demand from markets.”
Chief Financial Officer David Zinsner said, “It’s just literally hand-to-mouth, what we can get out of the fab and what we can get to customers is how we’re managing it.”
Lip-Bu stepped in March 2025. But most of the mess started before him. Former CEO Pat Gelsinger had poured billions into new fabs. Problem was, no one had signed up to use them. Those customers never showed.
At the same time, Pat shut down the exact tools and capacity Intel would later need. Intel lost $10 billion in manufacturing alone last year.
Meanwhile, GPU makers like Nvidia and AMD kept climbing. Intel sat out. They didn’t build AI-ready chips. They didn’t plan for the shift. And they definitely didn’t expect the CPU comeback. In late 2025, OpenAI, Google, and Amazon Web Services realized AI models also needed more CPUs to run. Fast. Those were the same older chips Intel had just stopped producing.
In July, Intel took an $800 million loss selling off older manufacturing machines. David told analysts, “Mostly older tools that we just couldn’t find a purpose for.”
Three months later, those same chips were suddenly in high demand. Intel had no inventory and didn’t want to restart production.
David said, “Obviously, we’re not looking to build more capacity there, and so as we get more demand, we’re constrained. In some ways, we’re living off of inventory.”
Intel has no customer for its future tech and no timeline either
Intel’s 14A process still has zero customers. Nothing. No deals. And the company refuses to build more facilities until someone signs up. So the timeline keeps slipping. Their top rival, TSMC, is already building new U.S. fabs while Intel stalls.
Inside the company, leadership says to be patient. Lip-Bu is working hard to bring in a customer. But no one at Intel is promising any real announcement. Someone familiar with the plans said the company will instead raise capital spending on 14A later this year. That’s how they’ll “signal” a partner was signed. No names. No contracts. Just a hint.
Lip-Bu admitted it’s a long road. “We are on a multiyear journey. It will take time and resolve.” That’s the best they’ve got right now.
To cut losses, Intel said in July it would fire 15% of its workers, cancel fab plans in Europe, and delay its Ohio plant. David said Intel will increase tool spending again in 2026 to deal with the chip shortage. But Rasgon from Bernstein said:-
“They either didn’t see the demand or didn’t believe it was real. They had an opportunity to provide a lot of supply and they didn’t. That’s disappointing.”
Intel already retired the tools for its Emerald Rapids and Granite Rapids CPU lines. Those were the chips everyone’s now asking for. Lip-Bu and David are scrambling. The inventory is gone. The fabs are empty. And every single chip customer they had is gone.
English (US)