- Intel shelved its plan to divest its NEX division after securing large investments and says the unit is now central to its AI and data-centre strategy.
- The move underlines that Intel sees value in tightly integrating networking hardware with its silicon and software stack to better compete in cloud, AI and edge markets.
What happened: Intel cancels NEX spin-off after financial backing
Intel announced on 3 December 2025 that it will retain its Networking and Communications group (known as NEX), reversing earlier intentions to sell or spin off the unit. The company said the decision follows a strategic review. In the months prior, Intel received a substantial $8.9 billion investment from the US government (in exchange for a 10 per cent stake), as well as additional capital from funders including SoftBank and chip-maker Nvidia, boosting its liquidity. With this improved cash position, Intel determined that the NEX unit should remain a core part of its business.
Intel executives explained that maintaining NEX internally allows for tighter integration between silicon, software, and networking systems. This cohesion, they argue, will help deliver more robust and competitive offerings across artificial-intelligence infrastructure, data centres, and edge computing. The company believes this alignment will sharpen its competitive edge in a rapidly evolving market.
The decision prompted a slight dip in Intel’s shares, down 0.3 per cent in after-hours trading, though the stock had edged up earlier in the day.
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Why it’s important
Intel’s U-turn on NEX signals a broader shift in how major chipmakers view networking hardware — not as peripheral assets to offload, but as strategic enablers central to AI and cloud-era competitiveness. By keeping NEX, Intel retains control over a full stack from silicon through to networking, potentially enabling more efficient delivery of AI, data-centre and edge-compute services.
For customers — from cloud providers to enterprises deploying edge infrastructure — this may lead to better-optimised systems, lower latency, and more cohesive support as silicon, software and networking evolve together rather than in silos.
On a market level, the decision reflects heightened demand for integrated solutions. As AI workloads grow and edge computing spreads, companies that can tightly combine CPU/accelerator, networking and software stand to benefit. Intel’s move also underscores confidence from large investors that it can steer this transformation, and marks an important moment in the industry’s pivot toward fully integrated computing stacks.
