Intel should shut down or sell off its GPU division, says analyst

It was barely two weeks ago that I reported from leaks that Intel's Arc desktop GPU is so bad, it could be CANCELLED altogether... But now a major analyst has said that Intel could shut its GPU business because it's bleeding too much money: $3.5 billion so far.

In a new market research report from Jon Peddie Research, the firm estimates that Intel's Accelerated Computing Systems and Graphics (AXG) group has lost $3.5 billion SO FAR. Intel bleeding out $3.5 billion in a division that should be around for decades to come and pull hundreds of billions in that time, is not a good sign, and neither is one of the biggest analysts in the world saying Intel should shut the GPU department down because of it.

JPR founder Jon Peddie said: "So, the rumor mill has been hinting that the party is over and that AXG would be the next group to be jettisoned".

• Read more: Intel Arc desktop GPU is so bad, it could be CANCELLED altogether

Peddie questions whether Intel should shut down its AXG group, saying "probably", adding that the company started its GPU project around 6 years ago and has not made profits yet. In that time, competitors AMD and NVIDIA have delivered multiple generations of graphics cards, with their next-gen RDNA 3 and Ada Lovelace GPU architectures right around the corner.

But now, now Intel is facing a "much stronger" AMD and NVIDIA, as well as 6+ new startups that are all jumping into the GPU race. Jon notes in his post that the "rules of engagement have dramatically changed while Intel sunk money into projects it can't seem to get off the ground".

Ooof.

The post continues, where he says that the best thing that Intel can do at this point is to "find a partner and sell off the group", adding that it could "even be dressed up as a strategic move, just as they did going to TSMC to build the dGPU in the first place".

• Read more: Intel Arc desktop GPU is so bad, it could be CANCELLED altogether
• Read more: Intel Arc GPU launch: spans 2 months, cards sent to 'select reviewers'
• Read more: Intel loses first AIB, won't make Arc GPUs over 'quality concerns'
• Read more: Intel Arc Alchemist GPU rumor: hardware flaw, 90FPS+ troubles in games
• Read more: Intel Arc A380 GPU reviews: like sitting in 'minefield, playing drunk'
• Read more: Intel marketing new flex: debunking non-existing rumors on Arc A780

JPR noted: "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".

The report continues: "The best thing Intel could do at this juncture is to find a partner and sell off the group. It could even be dressed up as a strategic move, just as they did going to TSMC to build the dGPU in the first place. The company can't continue to carry an enormous payroll, pay a competitive fab for wafers, and then ask governments to subsidize its investments in new fabs that can't even build the parts they are presumably designing. Not only is that a bewildering investment strategy, but it's also an embarrassment".