Intel continues to slog through an interminable rebuilding process, but a recent deal with Amazon Web Services (AWS) on bolstering custom chips powering AWS data centers and the growing artificial intelligence (AI) data center opportunity could finally be paving a path toward success.

The AWS work is tied to producing an AI-focused chip using Intel’s 18A processing node architecture and custom Xeon 6 chips on its Intel 3 architecture. More importantly, these chips are scheduled to be produced at an Intel facility in New Albany, Ohio.

Intel CEO Pat Gelsinger told investors during the chip giant’s latest earnings call that the AWS deal, along with other recent agreements, showed progress on Intel’s long-gestating corporate stability plan, though patience was still required.

“Solid progress on it,” Gelsinger said of its plans. “Clearly, next year, there's not a lot of financial benefit from it because we're only ramping late in the year. Thus, we'll be giving more qualitative metrics on progress as we go through the year.”

Those efforts are targeted at a surging AI-fueled data center opportunity that is pushing hyperscalers like AWS, Microsoft Azure, and Google Cloud Platform (GCP) to invest heavily into their data center infrastructure.

“New AI-oriented services and technology are helping the major cloud providers to ride a wave – new capabilities lead to increased demand, which leads to increased revenues, which then enables more investment in underlying technologies,” Synergy Research Group (SRG) Chief Analyst John Dinsdale wrote in a recent report.

SRG had previously noted that AWS, Microsoft, and GCP were in the midst of a data center expansion spree that will see them control nearly two-thirds of all data center capacity worldwide by the end of this decade, which is eight-times the capacity they controlled in 2017.

ABI Research noted in a separate report that this AI-fueled investment spree will also angle toward “large and mega-sized colocation facilities.” The firm noted that 28% of total worldwide data centers currently fit this size definition, but that “number will grow to 43% by 2030 as companies build larger data centers that can accommodate AI/generative AI workloads and other data-hungry applications.”

The AWS deal provides Intel with a significant boost toward garnering a larger share of this opportunity, which continues to be dominated by rivals like Nvidia, AMD, and Arm.

Gelsinger specifically pointed to some enterprise-focused AI efforts where it might find further traction with Gaudi 2 AI Accelerators.

“As you go into enterprise AI, we expect to place a more prominent role,” Gelsinger said. “Databases, embedding, refinement are much more attuned to CPU workloads and our strategy there is CPU plus accelerator or CPU plus Gaudi. So we see the enterprise use cases having a very long life associated with them going forward.”

Intel cost cutting and operational re-alignment In the meantime, Intel is focused on slashing costs and streamlining its portfolio. The cost cutting will revolve around plans to eliminate approximately 15,000 jobs by the end of this year, which is part of a plan to cut $10 billion in spending.

Intel is also in the process of moving its Edge business into its Client Computing Group (CCG) and refocusing its Network Edge (NEX) operations on networking and telecommunications.

Gelsinger also told investors that part of that internal reorganization will see it “re-establishing product portfolio leadership by narrowing our focus on fewer projects with the top priority being to maximize the value of our x86 franchise across the client, edge, and data center markets.”

Intel recently signed an agreement with rival AMD to form the x86 Advisory Group, which is focused on steering the future of that widely adopted platform. Other members of that founding group include Broadcom, Dell Technologies, Google Cloud, Hewlett Packard Enterprise (HPE), Microsoft, Lenovo, Oracle, and Red Hat.

“We definitely want to be very front footed with x86 for a full range of use cases, but also the AI use cases as well, and the industry is quite interested in joining us, participating and expanding the world's greatest architecture of all time,” Gelsinger said of those efforts. “The most industry influence, the broadest number of ISVs and applications and continuing that momentum forward.”

That momentum comment also applies broadly to Intel. Gelsinger is more than three-and-a-half years into his role as CEO at Intel, with the company still attempting to right its operational ship.

Intel’s latest results show that there is still years of work to be done, but a growing AI-based data center opportunity and re-alignment of its sails toward getting some wind at its back could keep that work on track.