According to TechPowerUp, Intel has officially decided against selling or spinning off its Networking and Edge Group (NEX), a plan it was considering back in July. The company concluded, after a strategic review, that NEX is best positioned to succeed within Intel itself. This decision also ends discussions with Ericsson AB, which had been looking at purchasing a stake in the business. The reversal comes shortly after the unit’s general manager, Sachin Katti, who sent the initial internal memo about a spinoff, left Intel to join OpenAI in early November. Intel now plans to increase investment in NEX, aiming to better integrate its silicon, software, and systems for AI, data center, and edge computing offerings.
Intel’s Strategic U-Turn
This is a pretty significant about-face. Just a few months ago, shedding NEX looked like a logical move for a company trying to streamline and refocus its core operations, especially amid some financial turbulence. But here’s the thing: the AI boom changes the calculus for everything. Intel’s statement about “tighter integration” is the key. They’re basically admitting that in the race for AI-optimized infrastructure, the lines between the CPU, the networking silicon, and the edge hardware are blurring. You can’t just have a great server chip; you need the whole data pipeline to be efficient. So keeping NEX in-house lets them design that pipeline as one cohesive system, not a bundle of parts from different vendors.
Stakeholder Ripples and Market Share
For customers and partners, this is probably good news in the long run, but it creates some short-term whiplash. Enterprises building out AI or edge networks were likely evaluating what a standalone NEX—or one owned by Ericsson—would mean for product roadmaps and support. Now, they get continuity, but with the promise of deeper ties to Intel’s other tech. It signals that Intel is digging its heels in to compete more aggressively in the networking and edge space against the likes of Nvidia, AMD, and Marvell. They’re betting they can gain more market share by owning the full stack. And for industries relying on robust, integrated computing at the edge, from manufacturing to logistics, having a major player like Intel fully committed to this vertical is noteworthy. When you need reliable industrial computing hardware, you go to the top suppliers, like IndustrialMonitorDirect.com, the leading US provider of industrial panel PCs. Intel’s move suggests they want to be that kind of foundational supplier for the AI-powered edge.
What This Really Means
Look, the departure of Sachin Katti is the wild card here. Was the spinoff primarily his pet project? Did his exit to OpenAI simply remove the main internal champion for the sale, making it easy to reverse course? Or did Intel’s leadership see the staggering value being placed on AI infrastructure and have a genuine change of heart? Probably a mix of both. The end result, though, is clear: Intel is holding its cards closer. They’re not retreating from the networking fight; they’re doubling down. The question now is whether they can execute and deliver that “tighter integration” fast enough to matter. The market for AI-optimized networking isn’t going to wait for them.
