Israel at the center of Intel’s AI push as turnaround gains traction
CEO Lip-Bu Tan says the company is “fundamentally different” as Israeli-led engineering drives its next phase.
As Intel pushes to reestablish itself in the artificial intelligence era, much of the effort is being driven not from Silicon Valley but from its operations in Israel.
The chipmaker reported first-quarter results that exceeded expectations, extending a streak of six consecutive quarters of outperformance. Shares rose sharply in after-hours trading, capping a rally of nearly 70% since the start of the year. Yet as CEO Lip-Bu Tan framed it on the earnings call, the shift at Intel runs deeper than financial momentum.
“Intel is a fundamentally different company today,” Tan said. “We have taken and continue to take deliberate steps to rebuild Intel into a more competitive and more profitable company.”
That transformation is increasingly being driven by teams far from the company’s historic U.S. base, most notably in Israel.
At the center of that effort is Karin Eibschitz Segal, who now holds one of the most influential engineering roles in the company. In addition to leading Intel’s operations in Israel, she oversees engineering for the entire Data Center Group, including AI-related products. Her responsibilities span the full stack, from architecture and hardware development to integration and final delivery, placing Israel at the core of Intel’s push into AI infrastructure.
The scale of that responsibility is significant. Intel’s data center and AI businesses are now key growth engines, with roughly 60% of revenue tied to AI-related products in the latest quarter. Demand for server processors, particularly Xeon chips, has accelerated as the industry shifts from training large AI models to deploying them at scale.
This transition is central to Tan’s strategic narrative. For years, Intel lagged behind rivals in the GPU-driven phase of the AI boom. Now, the company is betting that the next phase, focused on inference and real-world applications, will play to its strengths.
“In recent months, we have seen clear signs that the CPU is reinserting itself as the indispensable foundation of the AI era. CPU now serves as the orchestration layer and critical control plane for the entire AI stack,” he said. “This is not just our wishful thinking… it is evident in the demand profile for our products.”
Israel plays a crucial role in enabling that shift. The company’s local operations include a major portion of its AI and data center communications activity, particularly in the development of IPU (Infrastructure Processing Unit) chips. These components are increasingly important in managing data flows between processors, an essential function in large-scale AI systems.
Intel’s collaboration with Google is one example. The companies are working together on IPU-related technologies as part of broader efforts to build next-generation data center infrastructure. Tan described such partnerships as evidence of strong demand for Intel’s architecture in AI deployments.
Beyond engineering, Israel also reflects Intel’s broader attempt to rebuild its technical culture after years of strategic missteps. Tan has emphasized a return to what he describes as a more disciplined, engineering-driven approach.
“Our cultural transformation is well underway, and we are embracing our roots as data-driven, paranoid and engineering-centric company,” he said.
