The inability of Intel to fight against NVidia’s leadership in the Artificial Intelligence (AI) chip market has been one of the company's biggest missteps over the past decade.

In his first earnings call as Intel's new CEO, Lip-Bu Tan outlined his plans to change this, but cautioned that "this is not a quick fix." Tan explained that Intel would review its existing products to make them more suitable for emerging AI trends, such as robotics and agents designed to perform tasks for human users.

This task will be challenging because NVidia no longer just sells chips, it offers entire data centers, including chips, cables, and software compilers. On Thursday, Tan stated that Intel would adopt a similar approach. Meanwhile, Chief Financial Officer David Zinsner mentioned that, in the near future, Intel wouldn't be making many more acquisitions. “Our priority will need to be, at this point, getting the balance sheet to a better place,” Zinsner.

"We are taking a holistic approach to redefine our portfolio, to optimize our products for new and emerging AI workloads," Tan said. "Our goal is to become the platform of choice for our customers. This requires us to radically evolve our design and engineering mindset and anticipate the needs of our customer well in advance."

The historical practice at Intel involved allowing startup companies to build AI chips followed by purchasing them. Intel acquired Movidius Mobileye Nervana and Habana Labs throughout the period from 2016 to 2019 to help it enter the AI market.

Despite its ongoing dominance in autonomous driving Mobileye operates under independent ownership while Intel keeps minority control of the company yet the rest of its acquisitions proved ineffective against NVidia’s advancement.

“Intel has a long history of building important new silicon developments within its own walls, so I’m not shocked to see them focus on in-house developments for AI," said Bob O'Donnell, chief analyst at Technalysis Research. "If they can build the appropriate set of software support to help make it easy to deploy these new chips, then they have a chance but that is a big if.”

Research conducted by other analysts demonstrates NVidia’s powerful market position together with prominent AI chip development from Amazon.com and Google that hampers Intel's potential to enter the market space.

Intel presented its AI approach to Gabelli Funds portfolio manager Hendi Susanto who mentioned that the company will direct its efforts toward building AI-specific chip products and systems along with edge devices.