Intel Plans To Sell Part of Its Altera Stake and Teases New Deal With AWS

Intel is selling off part of its stake in Altera. According to Intel CEO Pat Gelsinger, the move will help the chipmaker raise capital “on Altera’s path to an IPO” as well as make room for Intel Foundry to become a wholly owned subsidiary. The announcement came in a memo issued to employees after Intel executives met earlier this week to discuss the direction and future of the company.

Altera, the programmable chip business the semiconductor giant purchased in 2015 for roughly $16.7 billion, will become its own publicly traded company by 2026. Altera currently designs field-programmable gate arrays (FPGAs), which are essentially chips that can be reprogrammed to adapt to changing technology.

After rumors began circling of Intel planning to sell Altera completely, Sandra Rivera, Altera’s CEO, told CRN that this wasn’t true. “We are executing to the plan, which is not a sale of Altera, but rather it is selling a stake in the business, which has always been the plan, which we’ve communicated for now over a year, and for us to do the IPO in 2026. That’s the plan,” she said.

According to CRN, Altera started operating independently from Intel earlier this year, though the business is still in the process of separating from many of the general and administrative functions managed by its parent company.

Intel’s market share has been slowly eroding as competitors like Nvidia produce upgraded chips that can handle the higher workloads required by artificial intelligence. Last month, Intel reported lower-than-expected quarterly earnings and announced a plan to cut $10 billion in costs as well as eliminate about 15,000 jobs.

“The board and I agreed that we have a lot of work ahead to drive greater efficiency, improve our profitability and enhance our market competitiveness,” Gelsinger noted in the memo this week.

In the same memo, Gelsinger said Intel is partnering with Amazon Web Services (AWS) to develop AI server chips. With AWS already designing chips for its data centers, the agreement may help Intel catch up with the ever-expanding need for AI-capable technology. The semiconductor heavyweight will reportedly be working on an AI “fabric chip” for AWS.

Intel also announced plans to “establish Intel Foundry as an independent subsidiary inside of Intel.” Gelsinger explained that this would provide benefits such as offering external foundry customers and suppliers greater independence and providing future flexibility to explore independent funding sources and optimize each business’s capital structure to drive growth and enhance shareholder value.

“All eyes will remain on us,” Gelsinger said. “We need to fight for every inch and execute better than ever before. Because that’s the only way to quiet our critics and deliver the results we know we’re capable of achieving.”

In March, Intel was granted nearly $8.5 billion through the CHIPS (Creating Helpful Incentives to Produce Semiconductors) Act. An additional $11 billion in loans will also be available. The money is intended to help companies stay ahead of the competition while keeping chip production within the U.S.