Intel, once the star American chip maker, has lagged behind competitors like AMD and Nvidia in the age of AI. But now, chipmakers say one shift in AI is actually helping their catch-up effort, and it’s the growing popularity of agentic AI.
In the company’s latest earnings call on Thursday, Intel reported revenue growth of 7.2% and said it expects next quarter’s revenue to top market expectations. Intel has many other factors to thank for its bright outlook, such as the recently announced lucrative deals with Elon Musk’s Tesla and SpaceX for an incredibly ambitious chip factory project, and an agreement with the Trump administration in which the United States took a 10% stake in the company. But the chipmaker is attributing much of its success last quarter to rising demand for central processing units (CPUs).
General processing units, or GPUs, have become the chips most closely associated with the AI boom, and, for a while, the CPUs that were powering most of the technology coming out of Silicon Valley decades ago were relegated to second-class status. Now, experts are claiming that the CPU is undergoing a renaissance as artificial intelligence enters a new phase, marked by intense hype for agentic AI systems like OpenClave and Anthropic’s Cloud Code.
CPU demand is strong as chips are more efficient in “certain orchestration, control plane” and data management tasks that are more important in agentic systems, Intel CEO Lip-Boo Tan said in the company’s earnings call.
Earlier this week, Morgan Stanley analysts said they expect the AI bottleneck to shift from GPUs to CPUs, claiming that agentic AI systems will need to focus more on coordination than just simple computing power, and CPUs can help act as that control layer. Nvidia executives have been blowing a similar tune for months.
“The bottleneck is shifting from compute to context management,” Dion Harris, senior director of HPC and AI hyperscale infrastructure solutions at Nvidia, said at a press briefing at CES in January.
Then, at Nvidia’s GPU technology conference last month, company CEO Jensen Huang said he expected agentic AI to bring in $1 trillion in revenue for the company, just before announcing a big push into CPUs.
Intel’s figures in the latest quarter are a strong indicator that this new phase of AI hype that has been predicted by tech insiders over the past few months is already underway.
“For the past few years, the story around high-performance computing was almost exclusively about GPUs and other accelerators,” Intel CEO Lip Bu-Tan said in the company’s earnings call. “In recent months, we have seen clear signs that the CPU is re-establishing itself as the inevitable foundation of the AI era. The CPU now serves as the orchestration layer and critical control plane for the entire AI stack. This isn’t just our wishful thinking; it’s what we hear from our customers, and it’s evident in the demand profile.”
Tan said in the earnings call that in previous years the ratio of CPUs to GPUs required was one to eight. Now, the ratio has reportedly increased to one to four. So this does not mean that the importance of GPU is going away. But this does mean that you should prepare yourself to hear the term CPU even more.
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