Intel (NASDAQ: INTC) is set for a major shakeup as incoming CEO Lip-Bu Tan prepares to take the reins. While his official start date is Tuesday, news of his aggressive artificial intelligence (AI) strategy has already sent the company’s stock surging. Shares of Intel climbed more than 8% on Monday following a Reuters report outlining Tan’s revitalization plans, which include expanding into AI server chips, foundation models, and robotics—areas currently dominated by Nvidia (NASDAQ: NVDA) and ARM (NASDAQ: ARM).
Intel’s Push Into AI and Foundry Expansion
Tan’s vision for Intel revolves around strengthening its foundry business, which manufactures chips for other companies, while simultaneously expanding its presence in the AI space. The company has long been an industry giant in traditional computing, but it has lagged in the rapidly growing AI chip market, allowing competitors like Nvidia and ARM to take the lead.
Intel’s foundry division, a key part of its turnaround plan, aims to produce custom AI chips for enterprise clients, data centers, and autonomous systems. With AI-driven technologies becoming a major focus across industries, Intel’s strategic shift signals an effort to reclaim its leadership position in the semiconductor sector.
Intel Stock Gains as Nvidia Cools
The market has reacted positively to Tan’s AI-centric approach, with Intel’s stock rallying nearly 29% year-to-date. This rebound comes after a market correction that saw the stock dip earlier this year. Meanwhile, Nvidia, which has been riding the AI boom, has dropped roughly 14% since the start of 2025. Investors are now eyeing Intel as a potential underdog in the AI race, with hopes that Tan’s leadership could steer the company toward a stronger competitive stance.
‘Tough Decisions’ Ahead for Intel
Beyond AI, Tan has hinted at potential internal restructuring, including further job cuts aimed at middle management. Last year, Intel laid off approximately 15,000 employees as part of cost-cutting measures. Speaking at a recent company town hall, Tan emphasized the need for “tough decisions” to ensure Intel’s long-term success.
His leadership experience includes over a decade at Cadence Design Systems (NASDAQ: CDNS), where he played a pivotal role in advancing semiconductor design technology. He also co-founded venture capital firm Walden and currently sits on the boards of Credo Technology Group (NASDAQ: CRDO) and Schneider Electric (EPA: SU).
Intel’s AI Ambitions Signal Market Shake-Up
Tan’s appointment and strategic shift come at a critical time for Intel, as the AI industry continues to evolve at breakneck speed. By focusing on AI chip development and expanding its foundry business, the company is positioning itself as a serious contender in the next wave of semiconductor innovation.
With a stock rally underway and growing investor confidence, all eyes are on Intel’s next moves as it seeks to challenge AI powerhouses and redefine its role in the industry.
