Google Expands Intel Partnership for AI Infrastructure as Intel Stock Surges 47%

Quick Facts

• Google Cloud extends multiyear partnership with Intel for Xeon processors and custom IPU chip development
• Intel stock closed up 4.7% at $61.72, extending a seven-session streak that has driven shares up 47.5%
• Partnership addresses growing CPU bottlenecks in AI workloads as agentic AI drives higher processor demand

Google and Intel announced an expanded multiyear partnership Thursday for AI infrastructure development. Google Cloud will continue deploying Intel Xeon processors and expand co-development of custom infrastructure processing units.

The collaboration focuses on two areas. Google Cloud continues using Intel Xeon 6 processors across its C4 and N4 instances. The companies also expand their work on custom ASIC-based IPUs that handle networking, storage and security functions.

“AI is reshaping how infrastructure is built and scaled,” said Intel CEO Lip-Bu Tan. “CPUs and IPUs are central to delivering the performance, efficiency and flexibility modern AI workloads demand.”

Intel shares jumped 4.7% to close at $61.72. The stock has surged 47.5% over seven trading sessions and 225% over the past year. Trading volume reached 154.3 million shares, 39% above the three-month average.

The deal addresses a shift in AI infrastructure needs. CPUs are becoming bottlenecks as AI workloads move beyond graphics processing units toward more complex, multi-step processing.

“CPUs are no longer seen as background infrastructure; they are becoming the active bottlenecks,” said Stephen Sopko, analyst at HyperFrame Research. “The surge in agentic AI is driving materially higher CPU demand.”

For Intel, the partnership provides a crucial foothold in Google’s data centers. The company has lost data center CPU market share to AMD while facing competition from ARM-based platforms and custom chips from hyperscalers.

Intel’s custom ASIC business, which includes IPU development with Google, grew more than 50% in 2025. The division exited the fourth quarter at an annualized revenue run rate above $1 billion.

Google and Intel have collaborated on IPUs since 2022. The companies developed the Mount Evans ASIC-based IPU that launched with Google’s C3 instances in 2022.

“Their Xeon roadmap gives us confidence that we can continue to meet the growing performance and efficiency demands of our workloads,” said Amin Vahdat, Google’s chief technologist for AI infrastructure.

Intel manufactures its latest Xeon processors on 18A technology at its Arizona fabrication plant that opened last year. Despite investing billions in foundry capabilities, Intel’s own processors remain the largest customer at the facility.

Read more: Google and Intel deepen AI infrastructure partnership