Intel's new CEO Lip-Bu Tan is betting on renewed CPU demand from AI agents to revive the chipmaker, bolstered by an $8.9 billion US government investment in August 2025.

Lip-Bu Tan, who became Intel's CEO in March 2025, has laid off approximately 34% of Intel's workforce, paused expansion plans in Germany and Poland, flattened corporate hierarchy, and brought in senior executives from Qualcomm and Arm to lead data center and AI divisions.

CPUs (central processing units that act as the brain of a computer) are seeing renewed demand because they are useful for inference—the step where trained AI models are deployed to power AI agents that can complete tasks on a person's behalf, rather than just answer questions.

The US government made an $8.9 billion investment in Intel's stock in August, roughly a 10% stake, to help expand research and manufacturing facilities in the US and ensure access to a domestic advanced-chip supply chain; Intel shares have surged about 300% since then.

Analysts say higher CPU demand could boost Intel's sales over the next few years if the company can quickly ramp up production and ensure manufacturing quality, though Intel still faces challenges in its chip-manufacturing foundry business.