Intel Struggles to Meet Surging Demand Amid AI Growth
Intel CEO Lip-Bu Tan revealed at Splunk’s .conf26 conference that the company is currently meeting only about half of customer demand for its processors. This shortage stems from a surge in need for CPUs used in artificial intelligence (AI) inference, which relies more on central processing units than graphics chips typically highlighted in AI discussions. Despite this supply challenge, Intel's financial performance has improved significantly. Revenue growth accelerated to 25% year-over-year in Q2 2026, with the data center and AI segment alone growing by 59%. Management forecasts continued momentum for Q3 revenue between $15.8 billion and $16.8 billion. The company is also seeing margin recovery, as its non-GAAP gross margin rose from below 30% a year ago to nearly 42%, with expectations of reaching 42% in the third quarter. Intel plans significant investments to expand production capacity, including ramping up new manufacturing processes like 18A and preparing for 14A by early 2027.
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