Shares of Intel are surging before the market opens Tuesday after the chipmaker said its foundry business would make some custom artificial intelligence chips for Amazon Web Services as it attempts to reinvigorate its business.
CEO Pat Gelsinger said in a message to employees late Monday that Intel will create an AI fabric chip for Amazon's cloud services division at its foundry business, a struggling division that he said would become a subsidiary of Intel.
Harlan Sur of JP Morgan believes that making the foundry business a subsidiary is a logical next step.
"We believe this move is a natural progression to drive better transparency and decision making/efficiencies and therefore should not be viewed as a surprise," the analyst wrote in a note to clients.
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