Intel spins off Network and Edge group as standalone business after posting $2.9b loss — seeking investors for NEX division amid massive internal restructuring
On top of layoffs and uncertainty for future nodes.

Intel’s transformation under CEO Lip-Bu Tan is entering a ruthless new phase. The company, which only days ago revealed $2.9 billion in quarterly losses and the slashing of 15% of its workforce (something in the works since last year), is now spinning off its Network and Edge Group (NEX) as a standalone business. It’s the latest move in a "sweeping effort" to streamline Intel’s core operations while divesting anything that doesn’t fit Tan’s new, AI-first strategy.
The plan, confirmed through a customer memo first reported by CRN and later corroborated by The Register, outlines Intel’s intention to find strategic investors for NEX. Intel will remain an “anchor investor,” much like it did with Altera—the programmable logic division it acquired in 2015 and partially sold off earlier this year. The NEX business, which covers networking silicon, Ethernet, and communications infrastructure, will now chart its own course.
“Backed by Intel, this new, independent company will be positioned to accelerate its customer-facing strategy and product roadmap by innovating faster and investing in new offerings,” said Sachin Katti, the group’s chief and Intel’s current AI strategy lead.
For Tan, the NEX spin-off is emblematic of a broader philosophy shift: Intel is exiting everything that’s not essential to its x86 and AI ambitions. During its Q2 earnings call, Tan described Intel as “overextended and inefficient,” citing a workforce reduction to 75,000 employees—a drop of over 30,000 from early 2025—and a pivot away from its once all-consuming foundry expansion plans.
Even Intel’s crown jewel, its process technology roadmap, is on the chopping block. Tan warned that Intel’s next-generation 14A (1.4nm-class) node could be canceled entirely if the company fails to secure a major external customer, effectively surrendering the cutting-edge process race to TSMC and Samsung.
Intel’s core CPU roadmap remains on track, at least for now. Panther Lake, built on the 18A node, is still planned for late 2025 with a heavy emphasis on AI performance and reintroducing Hyper-Threading to P-cores. On the server side, Granite Rapids is progressing, but AMD’s EPYC dominance continues to challenge Intel’s position in hyperscale workloads. With the NEX division spun out, Intel hopes to tighten its focus on these critical markets while cutting off segments that dilute margins.
The parallels to Altera’s spin-off are impossible to ignore. Like Altera, which Intel sold a 51% stake in to Silver Lake earlier this year, NEX could thrive as an independent entity free from Intel’s corporate bureaucracy. But the timing of the move raises questions about Intel’s ability to stabilize its finances while keeping pace with rivals in both AI and semiconductor technology. CEO Lip-Bu Tan has already admitted to having fallen way behind in a previous memo as well.
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To no one's surprise, Intel stock already took an 8% hit following its earnings report, and the news of the NEX spin-off underscores just how aggressively Tan is restructuring the company. Whether these bold moves will pay off depends on Intel’s ability to execute on its AI roadmap, deliver competitive x86 products, and—perhaps most critically—find the partners it needs to keep its process technology ambitions alive.
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Hassam Nasir is a die-hard hardware enthusiast with years of experience as a tech editor and writer, focusing on detailed CPU comparisons and general hardware news. When he’s not working, you’ll find him bending tubes for his ever-evolving custom water-loop gaming rig or benchmarking the latest CPUs and GPUs just for fun.
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hotaru251 honesty Intel's spiral is not friendly for investors ESPECIALLY after the statement about leaving cutting edge nodes as a possibility.Reply
Why would you invest in a company who is in such dire straights they are gutting their company & even AFTER that is in such a bad place it risks them leaving an entire market?
That is insanely high risk all together. You could easily invest in Nvidia or amd and get profit w/o any of that risk. -
acadia11 Ok,the head of their networking and edge computing division was given the reigns of their AI plans … what does this mean than for the the executive shake up? Can’t remember the guys name … but does he go with the new NEX company?Reply -
razor512 If that section of their business includes their PCIe NICs and WiFi adapters, then part of Intel's business issue is really bad marketing.Reply
For example, they the nothing to make it easier for people to get proper BE200 WiFi adapters, and they do not put enough pressure on stores to properly label the requirements and limitations of their XX1adapters and the CNVio requirement.
They need to be more clear about their networking hardware and market them at least as much as they market their video cards.
They need to push for lower cost 10GbE NICs and use their connections to get them on store shelves of every major electronics store, same for their WiFi adapters.
They need to push for multiple home user tiers of networking hardware. For example, Ease up on the price gouging and push some of their QSFP28 NICS and some Tofino 2 based switches as a higher end solution for home wired networking.
They came out in 2018 and that is more than enough time for them to drop the insane markups and target home users. It will make them stand out among the home networking market by offering something unique that can improve the user experience. -
TerryLaze
Doing a $100bil + dollar investment out of your own pocket isn't easy but the fact that they made $100bil to put into this investment is the reason to invest.hotaru251 said:honesty Intel's spiral is not friendly for investors ESPECIALLY after the statement about leaving cutting edge nodes as a possibility.
Why would you invest in a company who is in such dire straights they are gutting their company & even AFTER that is in such a bad place it risks them leaving an entire market?
If intel knows one thing it's how to make money.
The next few months will be the best time to invest in intel to try and make money since the release of 18A CPUs will be the 'make or break' point, either the stock will go up after that or at least you won't have spend that much on the stocks.
Nvidia and amd stock are so pumped up right now that there is no way to make any money from it...hotaru251 said:That is insanely high risk all together. You could easily invest in Nvidia or amd and get profit w/o any of that risk.
Buy low and sell high is how you make profit, not buy high and sell low. -
palladin9479 Hmm looks like this is being used as a way to generate capital, remember they still maintain ownership of the NEX company just not full ownership as they can now sell part of that ownership to a bank or investment fund. That capital can be used to stablish and fund core business units like processor design or possibly fabrication.Reply
They would do this if they expect the spun off division not to be a candidate for future growth. -
Moores_Ghost Edge? Sure. Network? Tan has lost his mind. I understand he's a penny pincher and they need that but he's pinching the wrong pennies, firing the wrong people, and hasn't changed Intel's internal culture, which is toxic at best.Reply
This is another move in a long list of moves designed to keep them afloat, not move them forward. He believes Intel's recovery to be a marathon when it doesn't have to be plus, this is a person that said he doesn't believe in "If you build it they will come" , a Field of Dreams quote. If you build it, as in do it right for the right price, they WILL come. AMD and Nvidia are proof enough.
They need a new corporate culture, they need extreme restructuring and now I feel they need a new CEO. Tan will bankrupt that company, but it will be later than sooner. I seriously doubt shareholders that believe in Intel want that. I'm shocked so few see it. Sadly by the time they do it may be too late.
I have no time for petty squabbling so if you do not like my opinion, please move on. -
Mr Majestyk I hope betting the entire house on AI blows up in his face. Another wannabe AI mercenary that missed the boat by a decade and despite saying he doesn't think Intel can catch up, is betting everything on it.Reply -
virgult
That would be monumentally stupid. The one ace they have up their sleeve is offering a competitor to CUDA on reasonably priced consumer GPUs. That's their entry point into the AI market. They've already developed it, all they need to do is support it and market if for what it is - then the entire hobbyist and educational/university market would be theirs.baboma said:the relentless focus on core and lack of any mention of consumer GPUs means that consumer dGPU is in all likelihood, done.