Intel is reportedly streamlining its operations, confirming plans to spin off its Network and Edge (NEX) business unit, according to sources familiar with the matter. The move signals a strategic realignment as the chip giant refines its focus, dialing back its ambitions in the competitive landscape of communication chips where it directly competes with Nvidia.
NEX, responsible for developing network and communication chips, produces technology comparable to that of Mellanox, the Israeli firm acquired by Nvidia in 2019 for $6.9 billion. That acquisition proved to be a savvy investment when they landed on of Nvidia Quantum-2 InfiniBand.
Mellanox has become a cornerstone of Nvidia’s Israeli operations and plays a pivotal role in its integrated AI hardware and software platform strategy. By divesting NEX, Intel effectively abandons its parallel pursuit of a similar, vertically integrated offering.
The NEX division boasts a global workforce numbering in the thousands, including approximately 400 employees in Israel. In 2024, NEX generated $5.8 billion in revenue, marking a modest 1% year-over-year increase and representing about 10.9% of Intel’s total revenue. However, Intel has ceased to report NEX revenue separately since the first quarter of 2025, indicating a diminishing strategic emphasis.
A memo, reportedly circulated internally and signed by Sachin Katti, NEX General Manager (and recently appointed Intel’s Chief Technology and AI Officer), outlines plans to establish NEX as an independent entity. The memo characterizes the envisioned company as “a brand new, stand-alone entity focused on delivering leading silicon solutions for critical communications, enterprise networking, and Ethernet connectivity infrastructure.”
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