Intel’s dGPU Group Has Lost the Company $3.5 Billion, Estimates Analyst

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Image: Intel

Some people are starting to think that Intel’s dGPU group might be getting the axe.

Per a recent article shared by analyst Jon Peddie, it’s being estimated that Intel’s venture into discrete GPUs and graphics cards have already cost the company $3.5 billion—or possibly more. Peddie pointed out that Intel started reporting on its dGPU group (known as AXG or accelerated graphics) back in Q1 2021, effectively confirming “staggering” losses of $2.1 billion, but apparently, the company has “actually invested more than that,” according to the analyst behind Jon Peddie Research.

Peddie seems pretty convinced that Intel CEO Pat Gelsinger is being tempted to kill the dGPU division, with him being an executive who isn’t afraid to strip away “non-essential business units” (e.g., Optane) in order to save in operating costs and losses.

Should Intel dump its AXG group? Probably. The company started the project six years ago. Since then, AMD and Nvidia have brought out three generations of new and stunningly powerful dGPUs, and more are in the pipeline. Four new companies have started up in China, and two new ones announced in the US. Intel is now facing a much stronger AMD and Nvidia, plus six start-ups—the rules of engagement have dramatically changed while Intel sunk money into projects it can’t seem to get off the ground.

Not many CEOs would put up with that, especially while repairing their company from previous misguided investments. Gelsinger was brought in to clean things up and get back to the company’s core strengths. The dGPU program is noble in its concept, intriguing in its alleged design, and an adventure too great for even Intel, especially in these days of recovery.

Peddie also mentioned that Intel has had “little to show” since the inception of its dGPU group, and while that seems like an exaggeration based on the recent release of its first desktop graphics cards in select markets, many might agree that Intel’s rollout of Arc could have been far better. It’s still unclear when certain Arc products might hit the U.S. market.

The analyst recommends that the best thing Intel could do at this point would be to sell its dGPU group off, possibly “dressed up as a strategic move,” to distance itself from its “embarrassment.”

Source: JPR

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Tsing Mui
Tsing has been writing the news for over 5 years, first at [H]ard|OCP and now at The FPS Review. He has a background in journalism and makes sure to give his readers the relevant context to why each news post matters.

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