Intel posted results that beat market expectations on surging demand from artificial intelligence (AI) data centers. With its third-quarter outlook also exceeding expectations, the company's shares jumped about 9% in after-hours trading.

Intel said in second-quarter results released on July 23 local time that revenue rose 25% from a year earlier to $16.1 billion, well above the market forecast of $14.4 billion. Adjusted earnings per share came to $0.42, double the market forecast of $0.21.

Demand for server central processing units (CPUs) led Intel's second-quarter performance. Revenue from its data center and AI business was about $6.26 billion, above the market estimate of $5.37 billion. Intel said earlier this year that CPU orders had exceeded its production capacity.

Revenue from the notebook and desktop PC business was about $8.88 billion, against a market estimate of $7.89 billion. Intel said the share of low-cost PC chips was reduced while the share of high-specification chips expanded, and that although unit sales declined, the average selling price (ASP) rose.

The foundry business, long a sore point for the company, posted revenue of $5.77 billion, above the market estimate of $5.55 billion. It is still in the red, however, with a loss of about $2.089 billion.

Internal transactions in the second quarter came to about $5.5 billion. Internal transactions refer to dealings between business units within the company. They are counted as revenue for each business unit but are deducted when calculating consolidated revenue to prevent double counting.

The third-quarter outlook also exceeded market expectations. Intel guided for third-quarter revenue of $15.8 billion to $16.8 billion and adjusted earnings per share of 38 cents. The average revenue estimate among analysts compiled by LSEG was $15.1 billion, with adjusted earnings per share of 27 cents.

Intel has also secured long-term supply contracts that promise recurring revenue. Chief Financial Officer David Zinsner told Reuters that the company has signed three- to five-year contracts with customers covering server CPUs and XPUs. Some contracts include both volume and pricing, and can be renegotiated depending on market conditions.

Intel is also raising capital expenditures to match growing demand. "We have raised this year's capital spending outlook to $20 billion from $18 billion," Zinsner said. "We expect next year's investment to increase meaningfully as well."

"AI is driving an unprecedented level of demand for computing," Intel Chief Executive Officer Lip-Bu Tan said. "We can drive sustained growth in areas such as CPUs, application-specific integrated circuits (ASICs), advanced packaging and foundry." He added, "The second-quarter results mark the highest revenue growth rate in the past 15 years," saying that "fast execution, accountable management and a customer-focused strategy made it possible."

SK Hynix is discussing a plan to jointly operate Intel’s semiconductor fabrication facility in Ohio rather than acquire it, according to a media report.

U.S. news outlet Semafor reported on July 22 that Intel is seeking a partner to operate its semiconductor fab in Ohio. Citing people familiar with the matter, the report said SK Hynix is discussing a joint operating arrangement instead of an acquisition. It added that the two companies have not begun formal negotiations and that discussions remain at an early stage.

The possibility of a joint operation has emerged as Intel’s Ohio fab project continues to face delays. Intel broke ground on the Ohio facility in 2022 with a planned investment of 28 billion dollars. The site spans about 1.2 million pyeong and is large enough to accommodate a total of eight semiconductor fabs. The site is comparable in scale to the Yongin semiconductor cluster being developed by SK Hynix in Yongin, Gyeonggi Province, which covers about 1.26 million pyeong.

Intel had originally planned to open the Ohio fab in 2025 but postponed completion to 2030 last year. The company was facing financial difficulties at the time and also carried out large-scale restructuring of its foundry business. An Intel spokesperson said, “Our commitment to the Ohio fab remains unchanged,” adding that the company continues to invest in accelerating construction of the site.

A shortage of memory semiconductor supply is also strengthening the rationale for potential cooperation between SK Hynix and Intel. SK Hynix is expanding memory production capacity by building additional semiconductor fabs in Yongin, Cheongju, and Indiana, but believes further capacity will still be needed. SK Group Chairman Chey Tae-won also said at the Korea Chamber of Commerce and Industry (KCCI) Jeju Forum on July 15 that the company needs to build additional semiconductor plants, including in the United States, and is currently searching for suitable locations.

Building a new fab requires significant time from site selection through mass production. Utilizing a site where construction has already progressed could allow production capacity to be secured more quickly. The Ohio fab is reported to have completed part of its foundational construction.

SK Hynix did not deny the possibility of a joint operation. Asked whether the company had discussed jointly operating the Ohio fab with Intel, an SK Hynix spokesperson said, “We cannot confirm that.”

Nvidia has begun shipping its next-generation Vera Rubin AI platform to customers, marking the commercial rollout of the company's latest rack-scale computing architecture for AI factories.

The company announced on July 21 that Vera Rubin has entered volume production and is already running in customer data centers. Nvidia had previously announced Vera Rubin's entry into mass production on June 1. Customers include Google, Microsoft, Oracle and CoreWeave.

Vera Rubin is a rack-scale AI infrastructure platform that tightly integrates 36 Nvidia Vera CPUs, 72 Rubin GPUs, NVLink 6 interconnects and storage into a single system. The compute tray eliminates internal cables, fans and hoses, reducing assembly time from several hours to about one minute.

The Vera CPU is Nvidia's first server processor designed in-house specifically for AI infrastructure. It features 88 custom Olympus CPU cores and is designed to deliver up to 1.8x the performance of conventional x86 processors while providing three times greater inter-core bandwidth and 40% lower memory latency.

Nvidia said Vera Rubin significantly reduces both power consumption and AI inference costs compared with the previous generation. Benchmark testing on CoreWeave's cloud platform showed the system delivers 10 times more AI throughput per megawatt than Grace Blackwell NVL72, substantially lowering the cost per generated token. The company said tokens per megawatt has become a key metric for AI infrastructure because it measures how much AI work can be performed within a fixed power budget.

The platform also supports liquid cooling with coolant inlet temperatures of up to 45 degrees Celsius, enabling chiller-free dry cooling in suitable environments. Nvidia said the design can save millions of gallons of water annually per megawatt of deployed computing capacity.