Intel Confirms Plans to Enter GPU Market as AI Chip Shortages Worsen

In the midst of all the RAM and GPU shortages driven largely by AI model training, Intel has decided to dip its toes into the GPU market too.

The company’s CEO, Lip-Bu Tan, made the announcement during the Cisco AI Summit when asked by Cisco President Jeetu Patel if Intel plans to build GPUs in the future.

“Yes, and I just hired the chief GPU architect, and he’s very good. I’m very delighted that he’s joining. It took a lot of persuasion, and I told him not just CPU, but GPU is also very important even for different applications and workloads,” Tan said. TechCrunch later confirmed that the project will be overseen by Kevork Kechichian, the executive vice president and general manager of Intel’s data centre group.

Intel's decision to dive into GPUs has been a long time coming. For decades, Intel’s identity has been tightly linked to central processing units (CPUs). From consumer laptops to enterprise-grade servers, Intel chips have been the backbone of modern computing.

But over time, the centre of gravity in computing has shifted. GPUs have become the workhorses of artificial intelligence, handling the parallel processing needed to train and run large models.

NVIDIA has benefited the most from this shift, with its data centre GPUs becoming the default choice for AI companies and cloud providers. AMD, meanwhile, has steadily grown its own GPU portfolio and is positioning itself as a strong alternative in the AI accelerator space.

With AI model usage and training on the rise, demand for GPUs has exploded, supply has struggled to keep up, and prices for both GPUs and memory chips have climbed.

Tan acknowledged this reality at the summit when asked about what is currently limiting the growth of AI.

"I think in terms of AI, the biggest challenge for a lot of my customers is memory. There's no relief as far as I know, and I've talked to the three key players, two of whom I talk to frequently, and they told me, 'Lip-Bu, there's no relief until 2028,’" he said.

Rather than immediately unveiling a finished product, Intel says it plans to shape its GPU strategy around customer needs, suggesting this is a longer-term bet rather than a quick reaction.

Tan said, “Good news is a couple of customers are engaging heavily and we're looking forward to serve them. Hopefully, second half of this year I will see the volume commitment from the customer which product they want to have and I can serve them.”

The company has also been quietly building a team of experienced talents, including hiring Eric Demers, a former Qualcomm executive with more than a decade of experience in engineering leadership, last month to lead GPU engineering.

While Intel's entry into the GPU market won’t suddenly dethrone Nvidia or AMD, it could eventually introduce more competition into a space that badly needs it. More players investing serious resources into GPUs could help ease shortages over time, stabilise prices, and give developers and enterprises more options.

For Intel, this represents both a challenge and an opportunity. It is a notable expansion beyond its traditional comfort zone, but also a chance to reassert itself as a full-spectrum computing company in an AI-first era. And for users, even the possibility of another major GPU contender is, at the very least, a hopeful sign.