Deal Between Intel and Microsoft Valued at Over $15 Billion

Intel succeeded in making Microsoft a client for custom-made chips, marking a major win for the ambitious transformation efforts under the leadership of CEO Pat Gelsinger.

Intel is moving towards manufacturing special chips for Microsoft designed by the software giant. The production comes as part of a deal valued at over 15 billion dollars, according to Intel.

Intel announced a partnership during the Intel Foundry event, but neither company specified the purpose of using the chips.

Bloomberg Agency pointed out that Microsoft was planning internal designs for both processors and artificial intelligence accelerators.

Satya Nadella, the CEO of Microsoft, stated in the official press release: “We are in the midst of a very exciting transformation in the platform that will bring about a radical shift in productivity for each individual organization and the industry as a whole.”

Nadella added: “We need reliable supplies of advanced, high-performance, high-quality semiconductors, which is why we are excited to work with Intel.”

Intel uses the 18A manufacturing process, which has been a significant part of Intel’s roadmap since CEO Pat Gelsinger took over to shake things up.

The company relies on its chip manufacturing facilities to once again reach the top of the chip industry world, and it appears that Microsoft may be the first major client for this project.

Relying on the production of designs from others is seen as a successful strategy for Taiwan Semiconductor Manufacturing Company (TSMC) to stay competitive.

TSMC has profitable partnerships with companies such as Apple, Qualcomm, and AMD. Jilssinger stated that Intel’s factory is a significant part of their strategy.

Intel’s plans come at a time when more companies are seeking to produce their own custom-designed chips, although Intel still faces challenges.

Intel previously postponed the opening of a chip factory in Ohio worth $20 billion until 2026, originally planned for 2025, citing slow chip market and delays in government grants.