April 9 (Reuters) - Intel and Google have expanded their partnership to advance the use of artificial intelligence-focused central processing units and to develop custom infrastructure processors, as shifting use of AI drives renewed demand for traditional computing chips.
Companies are increasingly moving away from using AI for training models to deploying them, fueling the need for generalist CPU chips designed to handle heavy workloads.
Under the agreement, announced on Thursday, Alphabet's Google unit will continue to deploy Intel's Xeon processors that support a broad range of workloads such as inference and general-purpose computing. The company will also use Intel's latest Xeon 6 chips.
Intel and Google will also expand the co-development of custom infrastructure processing units (IPUs), which can handle tasks traditionally managed by the CPU, enabling more efficient computing.
"Scaling AI requires more than accelerators - it requires balanced systems. CPUs and IPUs are central to delivering the performance, efficiency and flexibility modern AI workloads demand," said Intel CEO Lip-Bu Tan.
Surging demand for agentic AI systems - which perform complex, multi-step operations beyond simple chatbot functionality - has boosted the requirement for significantly more CPU processing power.
The surge in demand for CPUs could help Intel to strengthen its balance sheet and acquire new customers after the chip manufacturer lost market share to rivals during the early years of the AI boom.
The company said on Tuesday it will join Elon Musk's Terafab AI chip complex project with SpaceX and Tesla to power the billionaire's robotics and data center ambitions.
Intel also plans to take full ownership of its Ireland manufacturing facility, where it makes Xeon server processors, by buying back the stake it had sold to Apollo Global Management.
(Reporting by Zaheer Kachwala in Bengaluru; Editing by Sriraj Kalluvila)
