Intel Corp. forecast second-quarter revenue above Wall Street expectations.

Intel Corp. INTC-Q forecast second-quarter revenue above Wall Street expectations on Thursday, underscoring booming demand for the chip maker’s server chips used ‌in artificial-intelligence data centres. Shares of Intel surged 15 per cent in extended trading, adding US$49-billion to its market value and extending its 81-per-cent rebound so far this year. The company expects revenue of between US$13.8-billion and US$14.8-billion, compared with ⁠an estimate of US$13.07-billion, according to data compiled by LSEG. After years of management blunders left the former icon of chipmaking without a meaningful foothold in the booming artificial-intelligence industry, chief executive Lip-Bu Tan put a revival plan in place to shore up Intel’s balance sheet through asset sales and layoffs. Mr. Tan also secured large investments and struck deals with the U.S. government, SoftBank Group Corp. ‌and Nvidia Corp., giving Intel much-needed fuel to put into its manufacturing operations and inspire strong investor confidence in the firm’s longer-term growth. Intel joins Musk’s Terafab AI chip project to power humanoid, data centre goals While Intel missed out on the early years of the AI boom, a new opportunity in the form of advanced central processing units (CPUs) has emerged as cloud providers shift from training models to deploying ‌them. “The CPU [is] having a renaissance here,” ‌finance chief Dave Zinsner said in an interview with Reuters. “We’re starting to be a meaningful beneficiary of the AI investments that are happening.” While graphic processing units (GPUs) ⁠are used to process large-scale mathematical operations required to generate content, CPUs are better ⁠suited to handle workloads done by autonomous AI agents with reasoning capabilities. Part of the reason for the company’s optimistic revenue projection is that Intel has elected to raise prices on its chips in order to pay for the rising costs associated with producing more of them, Mr. Zinsner said in an interview. However, Intel’s ability to meet demand still depends on whether the company can continue to manufacture its processors at scale and without bottlenecks and supply issues. Intel on Wednesday ⁠landed a win for its manufacturing business, securing Elon Musk’s Tesla Inc. as its first major customer for the next-generation 14A process to make chips at its Terafab project, an advanced AI chip complex Mr. Musk has envisioned in Austin, Tex. Mr. Zinsner declined to provide financial details about the arrangement with the Terafab project. “I think the details of this partnership are still being worked between Lip-Bu and Elon,” Mr. ⁠Zinsner said. Intel earlier this month expanded its AI CPU partnership with Alphabet’s Google, and joined Mr. Musk’s Terafab AI chip complex project with SpaceX and Tesla to make processors ⁠powering robotics and data centres. First-quarter revenue came in at US$13.58-billion, beating estimates of US$12.42-billion. Revenue in the company’s data centre and AI segment ‌came in at US$5.1-billion, compared with estimates of US$4.41-billion. Competition in the CPU space remains high, as rivals Nvidia, Advanced Micro Devices and Arm also eye the market and roll out products to get ahead. Intel reported a first-quarter loss per share of 73 US cents as it incurred more than US$4-billion in restructuring charges. On an adjusted basis, the company earned 29 US cents a share, beating the estimate of 1 US cent.

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