To The Moon

I refer to my post on $Intel(INTC)$ dated Thu, 09 Apr 2026 that did not garner much readership (click here ! for details).

It talks about how INTC has been left out in the wilderness due to mismanagement.

And how under new CEO, Lip-Bu Tan - there is a glimmer of hope that this former #1 chip maker is going to shine once again.

Hardly days have gone by when the biggest bomb (albeit a good one) has just dropped.

I suspect with the news hit main stream, INTC will begin its ascend in solid footing.

The Good News ?

It was officially reported on Tomshardware that INTC and $Alphabet(GOOG)$ have inked a multi-year collaboration under which GOOG will continue deploying Intel Xeon platforms for its next generation of AI and cloud infrastructure.

These GOOG platforms will rely not only on INTC's upcoming Xeon CPUs, but also on its custom infrastructure processing units (IPUs) co-designed collaboratively by INTC and GOOG.

The announcement comes amid accelerating adoption of custom $ARM Holdings(ARM)$ based processors for AI workloads.

According to INTC, CEO, Lip-Bu Tan:

• Scaling AI requires more than accelerators - it requires balanced systems.

• CPUs & IPUs are central to delivering the performance, efficiency and flexibility modern AI workloads demand.

GOOG currently employs INTC Xeon 5 and Xeon 6 processors for a variety of workloads, including (a) large-scale AI training coordination, (b) latency-sensitive inference, and (c) general-purpose computing.

Although GOOG's custom Armv9-based Axion processors provide the cloud giant more control and efficiency at lower cost, many workloads that are run in GOOG's data centers need to either be backwards compatible with x86 or just need maximum single-thread performance offered by INTC’s Xeon CPUs.

This is something that is expected to continue for years to come, which is why the 2 companies inked the deal.

In a bid to make Intel Xeon platforms more efficient and suitable for its hyperscale data centers, GOOG will also co-develop custom IPUs together with INTC to offload networking, storage, and security functions from host CPUs.

In the end, Intel Xeon platforms will combine x86 architecture with high single-thread performance and custom-built infrastructure processing, which will make them more competitive in GOOG's highly customized environments.

As confirmed by GOOG, SVP & Chief Technologist, Amin Vahdat:

• CPUs and infrastructure acceleration remain a cornerstone of AI systems ranging from training orchestration to inference and deployment.

The announcement comes at a time when hyperscalers and AI platform developers are accelerating the adoption of their own custom CPUs based on the ARM instruction set architecture.

Just a week ago, Counterpoint Research released a note claiming that 90% of AI servers running custom-silicon processors will rely on the ARM’s ISA, leaving x86 and RISC-V about 10%.

In a twist of event, announcement by INTC and GOOG cements Xeon CPUs with custom IPUs will continue to be used for AI and other demanding workloads for years to come, which is something to be expected anyway.

INTC's Xeon processors have powered cloud infrastructure since its inception in the 2000s, and GOOG's own servers before that.

In short, x86 in general and Xeon in particular will not leave GOOG's data center premises any time soon.

The “timely” announcement clearly reemphasizes the relevance of Intel's Xeon CPUs.

When such a message comes from GOOG, that has been deploying special-purpose custom accelerators for years across virtually all of its services, it is a confidence booster that gets amplified significantly.

Vahdat further added - INTC has been a trusted partner for nearly 2 decades, and their Xeon roadmap gives us confidence that GOOG, can continue to meet the growing performance and efficiency demands of our workloads.

Closing words.

The multi-year agreement between INTC and GOOG represents a strategic pivot for INTC, moving from a "commodity CPU vendor" to an "essential AI systems architect."

With INTC closing at $61.72 (as of 10 Apr 2026), this partnership provides the fundamental momentum needed to breach the $70 psychological barrier.

Setting the record straight.

Historically, US market has rewarded GPU-centric plays (eg. $NVIDIA(NVDA)$), while penalizing INTC for a perceived lack of AI relevance.

The latest deal shifts that perception:

• Beyond Accelerators: INTC’s messaging that "AI doesn't run on accelerators alone, it runs on systems", is now backed by GOOG’s deployment of Xeon 6 processors.

• CPU as Orchestrator: As AI workloads evolve toward "Agentic AI" (multi-step tasks requiring heavy logic and API management), demand for high-performance CPUs for orchestration increases. This deal validates the Xeon roadmap as the industry standard for these complex workflows.

The co-development of custom ASIC-based Infrastructure Processing Units (IPUs) is a significant margin expander:

• Capacity Recovery: IPUs offload networking, storage, and security from the host CPU. For GOOG, this means "recovering" compute capacity; for INTC, it means selling a secondary, high-value chip alongside every Xeon processor.

• Sticky Ecosystems: Co-developing custom IPUs with a hyperscaler like GOOG creates high switching costs, ensuring INTC remains embedded in GOOG Cloud's architecture for multiple hardware generations.

GOOG’s commitment to Xeon 6 is a powerful countersignal to the rise of internal ARM-based chips (like GOOG's own Axion) and AMD’s EPYC series:

• Hyperscale Confidence: By aligning multiple generations of infrastructure with INTC, GOOG is signaling that INTCl’s performance-per-watt and total cost of ownership (TCO) remain competitive at the highest scale.

• Market Share Stability: This partnership helps stabilize INTC’s Data Center and AI (DCAI) segment, that has faced intense pressure. Stability in this core segment is a prerequisite for the stock to reach a $70 or higher valuation.

While not the primary focus of the announcement, the "custom ASIC" nature of the IPU deal hints at deeper ties with Intel Foundry:

• Packaging Lead: Intel’s advanced packaging (EMIB and Foveros) is likely a key component in these custom IPUs. Success here serves as a "live demo" for other tech giants considering INTC’s foundry services for their own AI chips (eg. $Apple(AAPL)$ for its Macbook)

This deal proves that INTC is not being "designed out" of the AI era.

Rather, it is becoming the specialized glue that holds hyperscale AI together.

For investors, the GOOG partnership provides the "Bible" of proof that INTC’s turnaround is delivering tangible, high-scale results.

After all that has been said and done - do you buy the story ? Let’s watch US market for confirmation in the coming days and weeks.

Remember to check out my other posts. (See below). Help to Repost ok, Thanks.

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• Do you think US market will have a strong & positive reaction to this news ?

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