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The rollout of large-scale AI infrastructure proved so powerful that it was able to revive Intel, which had previously been in dire straits. According to the chipmaker’s financial report, the company achieved its fastest revenue growth in the past 15 years last quarter, a feat made possible almost entirely by increased demand for semiconductor products for AI data centers.
In the second quarter of 2026, Intel’s total revenue rose 25% compared to the same period last year, while the division responsible for data centers and AI saw a 59% jump in revenue.
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Once the leading American chipmaker, Intel ceded its leadership position to other players, notably the market leader in graphics processors – NVIDIA – and subsequently faced a significant drop in sales. The situation reached a point where, in December 2024, former CEO Pat Gelsinger was effectively removed from his position, and in March 2025, Lip-Bu Tan took over as CEO, promising to lead a major turnaround. The Trump administration’s intervention also played a key role, as it acquired a 10% stake in the company in August. It is reported that Trump and his team provided crucial assistance in brokering deals between Intel and Silicon Valley giants such as SpaceX, Apple, and NVIDIA, which ultimately cemented the chipmaker’s presence in the AI sector.
Intel’s rapid recovery coincided with a sort of renaissance of classic central processing units (CPUs). Although the hype surrounding AI is traditionally associated with graphics processing units (GPUs), central processing units remain Intel’s core specialty. As interest in agent-based AI has grown, the role of CPUs has once again increased, as they are considered optimally suited for performing the tasks that form the basis of agent-based systems, particularly for inference computations.
As Intel executive Lip-Bu Tan noted during Thursday’s quarterly earnings conference call, the data center and AI division delivered strong results. According to him, there is accelerating demand from cloud and enterprise customers, who are increasingly recognizing the critical importance of CPUs in general – and the x86 architecture in particular – for building AI infrastructure.
Although the rapid rise of the AI segment has proven extremely profitable, PC chips remain Intel’s primary source of revenue. While revenue from AI and data centers grew by an impressive 59%, the Consumer Solutions division (recently renamed the Client Computing and Physical AI Group) recorded a revenue increase of only 13% compared to the same period last year.
Sales and prices of computers have come under significant pressure over the past year due to the crisis in the memory chip market caused by the AI boom. Semiconductor manufacturers have massively shifted their production capacity to meet the enormous demand from AI data centers, leading to a shortage of high-bandwidth memory for consumer electronics, including PCs and smartphones. With demand remaining high and supply tight, retail prices for consumers have risen, while sales volumes have declined. According to data from International Data Corporation analysts released earlier this month, global PC shipments recorded their first decline in the past two years. For the same reason, global smartphone shipments also fell to a historic low for the current year.
Intel predicts that the memory shortage will continue to negatively impact the computer market at least through the end of this year. Intel CFO David Zinsner told investors that PC demand is expected to be below seasonal norms in the second half of the year, and that for 2026 as a whole, the decline will reach the low double digits due to the shortage and rising memory prices.
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