For origin of this blog, see this post.
AI prompt:
Some suggest this: we’re down to just two x86 CPU producers. There’s an insatiable global demand for compute, and the world needs more chips. x86 CPUs are especially well-suited for advanced AI agentic workloads, thanks to their strong general-purpose performance, broad software compatibility, and ability to handle complex, multi-threaded tasks efficiently. Is there a place for continuing production of x86 CPUs?
OpenGPT:
Yes—there is very much a place for continuing x86 CPU production, and not just as legacy inertia. But that place is more specific, more complementary to accelerators, and more structurally important than many “x86 is dead” narratives suggest.
Let me frame this in four layers: market structure, workload reality (including agentic AI), architectural strengths/limits, and what this implies for Intel/AMD going forward.
1. Market reality: two producers ≠ shrinking relevance
It’s true we’re effectively down to two x86 designers (Intel and AMD), but that does not imply declining demand. In fact:
Global compute demand is exploding, not just AI training but:
inference
orchestration
data preprocessing
memory-heavy workloads
enterprise backends
The bottleneck is increasingly system-level compute, not raw FLOPS alone.
Crucially:
Every GPU, NPU, TPU, and AI accelerator still needs CPUs to feed it, schedule work, handle exceptions, manage memory, and run control logic.
The more accelerators you deploy, the more CPU orchestration you need.
This is why hyperscalers keep buying CPUs even as GPU spending dwarfs everything else.
2. Agentic AI: why x86 remains relevant (and underrated)
Your claim about agentic workloads is actually well-founded.
Agentic AI workloads tend to be:
Branch-heavy
Latency-sensitive
Multi-threaded
Memory- and cache-intensive
Full of irregular control flow, not dense matrix math
Examples:
Tool invocation
Retrieval-augmented generation (RAG)
Planning and decision trees
Long-running processes with state
API orchestration and error handling
These are not ideal GPU workloads.
Why x86 fits well here:
Strong single-thread and branch performance
Large caches and mature memory hierarchies
Excellent OS, VM, and container support
Decades of tuned compilers, runtimes, and debugging tools
NUMA-aware scaling for complex systems
In practice:
GPUs think. CPUs run the system.
Agentic AI amplifies this dynamic rather than replacing it.
3. Why ARM hasn’t “killed” x86 (yet)
ARM is absolutely winning in:
Power efficiency
Mobile
Custom hyperscaler silicon (e.g., Graviton)
But ARM still faces challenges in:
Legacy enterprise software
Binary compatibility
Deep ecosystem maturity
High-performance general-purpose workloads with complex threading
That’s why:
Even ARM-heavy datacenters still keep x86 for mixed workloads
Many enterprises won’t rewrite or re-certify mission-critical software
x86 remains the lowest-friction compute option globally
x86’s superpower is not elegance—it’s frictionlessness.
4. The real future of x86: not dominant, but indispensable
The future is heterogeneous compute, not “CPU vs GPU.”
Likely steady-state:
GPUs / accelerators → training + dense inference
x86 CPUs → orchestration, agents, memory-heavy tasks, enterprise compute
ARM → power-efficient scale-out and custom cloud instances
For Intel and AMD:
x86 CPUs become higher-value system controllers, not volume-only parts
Integration with accelerators (chiplets, CXL, unified memory) is critical
Margins come from platform value, not just core counts
Intel’s push into:
advanced packaging
foundry services
CPU + accelerator platforms
…makes sense only if x86 remains relevant. And it does.
Bottom line
Yes—there is a durable, even growing role for x86 CPUs, especially because:
Compute demand is exploding system-wide, not just in accelerators
Agentic AI workloads favor CPUs far more than dense GPUs
Software compatibility and enterprise inertia still matter enormously
Heterogeneous systems increase CPU importance, not reduce it
x86 may no longer be the center of compute—but it remains the backbone.
If you want, next time we can dig into:
whether Intel’s 18A strategy materially strengthens this position
how AMD’s chiplet model fits into an agentic-AI world
or whether RISC-V meaningfully threatens x86 in this role over the next decade
***********************************************
AI prompt, #2:
All those options are excellent. Another thought: could the x86 CPU be a distraction from the 14A and 18A effort? Take human resources and cash from the latter for the former?
ChatGPT reply, #2:
This is a very sharp question, and it gets to the heart of Intel’s existential trade-off.
Short answer: yes, x86 can be a distraction from 18A/14A—but abandoning x86 would be even more dangerous.The real issue is how tightly Intel couples the two.
Let’s unpack this carefully.
1. The core tension: product company vs. manufacturing company
Intel is trying to do two brutally hard things at once:
Regain process leadership (18A → 14A)
Defend and evolve a massive x86 product franchise
Historically, Intel succeeded because:
process leadership automatically translated into product leadership.
That flywheel broke around 10nm.
Now the risk is clear:
18A/14A require extreme focus, capital, and top engineering talent
x86 roadmaps consume:
architecture teams
validation
software enablement
platform support
customer commitments that cannot slip
Those efforts compete for the same scarce people.
2. Human capital is the real constraint (not cash)
Intel can raise debt, cut dividends, or get CHIPS Act money.
What it cannot easily create:
world-class process integration engineers
EUV / High-NA specialists
yield-learning veterans
cross-disciplinary design-technology co-optimization (DTCO) leaders
These people are:
rare
slow to train
essential for 18A and 14A
If Intel:
diverts its best engineers into x86 firefighting
or forces process teams to hit suboptimal design compromises to save CPU schedules
…then yes, x86 becomes a tax on foundry success.
3. But killing or shrinking x86 would also hurt 18A
Here’s the paradox.
If Intel deprioritized x86 sharply:
a) 18A loses its “hero product”
Internal CPUs are:
the most aggressive
the most demanding
the fastest feedback loop for yield learning
External foundry customers will not bet first silicon on Intel Foundry Services without proof.
x86 CPUs are Intel’s:
Process confidence engine
TSMC has Apple. Intel has x86.
b) Cash flow collapses at the worst possible time
Foundry is cash-negative for years
x86 still pays the bills
Losing CPU revenue forces:
more debt
less capex flexibility
weaker negotiating position with customers and governments
c) Cultural credibility suffers
If Intel “gives up” on x86:
customers doubt long-term commitment
foundry customers question stability
engineers leave for TSMC, Nvidia, or Apple
4. The right answer: x86 must serve 18A, not compete with it
The winning strategy is subordination, not elimination.
That means:
1) Fewer, tighter x86 SKUs
Less market segmentation
Fewer sockets
Longer-lived platforms
2) Design for process learning first
Early 18A CPUs should be:
aggressive
not necessarily perfect
optimized for yield learning, not peak margins
3) Organizational separation with hard boundaries
Foundry P&L must not bend to CPU schedule pressure
CPU teams must live with slips if process learning demands it
4) Leverage chiplets aggressively
Keep x86 cores evolving
Move risk elsewhere:
IO
accelerators
memory tiles
Reduce full-node dependency
If Intel fails to impose this discipline, x86 absolutely becomes a distraction.
5. Why this matters even more for 14A than 18A
18A is about:
restoring credibility
14A is about:
sustainability
High-NA EUV, tighter pitches, new materials:
amplify every organizational inefficiency
punish split focus brutally
By 14A:
Intel must behave like TSMC:
process-first
customer-agnostic
internally disciplined
If x86 is still dictating schedules at 14A, the foundry effort will fail.
Bottom line
Yes, x86 can absolutely be a distraction—if Intel treats it as a co-equal priority to process leadership.
But:
abandoning x86 would remove the cash, confidence, and validation engine needed for 18A/14A
the correct approach is to enslave x86 to the process roadmap, not the other way around
In one sentence:
Intel doesn’t need less x86—it needs less x86 control.
If you want next time, we can explore:
whether Pat Gelsinger’s org changes actually enforce this separation
how TSMC internally protects process teams from Apple pressure
or what a true “Intel-as-TSMC-with-products” structure would look like
***********************************************
AI prompt, #3:
Wow, that’s interesting: “Intel-as-TSMC-with-products” structure or how TSMC internally protects process teams from Apple pressure. I’m curious how TSMA mitigates pressure from Apple.
ChatGPT reply, #3:
This is a great place to zoom in, because TSMC’s ability to say “no” to Apple—selectively and structurally—is one of the least appreciated reasons it dominates advanced manufacturing. Apple is TSMC’s largest and most demanding customer, yet Apple does not run TSMC. That is not accidental.
Below is how TSMC mitigates Apple pressure—organizationally, culturally, and economically—and why this is so hard for Intel to replicate.
1. The most important rule: Apple is a customer, not a partner
TSMC enforces a bright line that Intel historically never did with its internal product groups.
At TSMC:
Process roadmaps are set independently of any single customer
Apple can:
influence
request
co-optimize
Apple cannot:
dictate timing
override risk thresholds
force premature node launches
This sounds obvious—but it is radical in practice.
Apple does not get:
unilateral schedule control
process changes that harm long-term yield learning
exceptions that would destabilize the node for others
Intel, by contrast, spent years letting internal CPU deadlines dictate process behavior—with disastrous results.
2. Organizational firewall: process teams are insulated by design
At TSMC, process technology is sacred.
Key structural features:
a) Process engineers do not report through customer-facing orgs
Customer teams (Apple, Nvidia, AMD, etc.) are interfaces, not decision-makers
Process teams report up a chain where:
yield
defect density
long-term scalability
…matter more than any single tapeout.
b) “No single customer owns the node”
Even Apple’s flagship nodes (e.g., N5, N3):
are explicitly designed to be multi-customer nodes
are validated against classes of designs, not Apple-specific layouts
Apple may be first—but never alone.
This prevents node distortion.
3. Apple pays for capacity, not control
This is subtle and crucial.
Apple:
prepays billions
commits to enormous wafer volumes
absorbs early cost premiums
But:
Apple pays to reserve capacity, not to redefine the process
If Apple wants something exotic:
it often goes into design workarounds
or advanced packaging
or custom SRAM structures that do not break the base node
TSMC monetizes Apple’s pressure instead of surrendering to it.
4. Conservative node definitions (why TSMC looks “slow” but wins)
TSMC deliberately:
under-promises
over-delivers
freezes node definitions early
Once a node is defined:
late-breaking customer demands are rejected or deferred
risk is pushed to N+1, not forced into N
This frustrates Apple engineers—but it preserves:
yield ramps
reliability
learning continuity
Intel historically did the opposite: redefine nodes mid-flight.
5. Apple is powerful—but replaceable (psychologically)
Here’s the uncomfortable truth:
TSMC acts like Apple is replaceable—even if, financially, that would hurt.
Why this works:
Apple has no alternative at leading edge
Samsung is not competitive at scale
Intel Foundry is not yet proven
This asymmetry gives TSMC leverage.
TSMC never says this publicly, but internally:
“If we break the process for Apple, we break it for everyone—and then we lose all customers.”
That logic always wins.
6. Cultural memory of near-failure
TSMC’s discipline is not theoretical.
Morris Chang lived through:
failed IDM models
customer entanglement disasters
The company has institutional memory that:
process purity beats heroics
short-term accommodation destroys long-term trust
This culture is deeply embedded and reinforced by promotion paths:
process excellence → advancement
customer appeasement → not rewarded
7. Why Intel struggles to copy this (even today)
Intel’s hardest problem is not technology—it’s internal customer pressure.
Differences:
Intel Foundry serves internal product teams with political power
Missed CPU launches have executive consequences
Process teams historically absorbed blame for product failures
Until Intel can:
let x86 slip without organizational punishment
protect process leaders from product escalation
truly operate foundry-first internally
…it cannot behave like TSMC, no matter how good 18A or 14A are.
Bottom line
TSMC mitigates Apple pressure by making process integrity non-negotiable and structurally protected.
Apple gets:
early access
massive scale
co-optimization
Apple does not get:
schedule veto power
mid-node redefinitions
process exceptions that hurt the ecosystem
If Intel wants to become “TSMC with products,” it must internalize one brutal lesson:
The foundry must be willing to disappoint its biggest customer—especially when that customer is itself.
If you’d like next time, we can explore:
what an Intel org chart would look like if this discipline were real
how Samsung failed to enforce these boundaries
or whether Intel’s current leadership structure genuinely supports this model
AI prompt, #4:
Might it be better if Intel spun off its “biggest customer”? Years ago HP spun off its huge printer division. If not spin off, make the barriers even stronger between the various Intel divisions? I probably won’t go farther than this. I’ve strayed far away from original query about continued need for the x86 CPU. I’ve learned a lot.
ChatGPT reply, #4:
You haven’t strayed at all—you’ve followed the question to its logical endpoint. The “continued need for x86” inevitably turns into organizational design under extreme technological pressure. That’s exactly the right place to land.
Let me answer this cleanly and then stop where you intend to stop.
Short answer
A full spin-off of Intel’s “biggest customer” (x86 product groups) would probably fail—but much stronger internal barriers are not only better, they are essential.
Spinning off sounds elegant. In practice, it introduces new risks that could kill the foundry before it matures.
Why a spin-off is tempting (and intellectually sound)
Your HP analogy is a good one.
A spin-off would:
eliminate internal political pressure
create true customer/foundry discipline
force x86 teams to live with real market consequences
instantly clarify capital allocation
In theory, it would turn Intel Foundry into “TSMC-like” overnight.
So why not?
Why a spin-off is probably the wrong move today
1. The foundry still needs a “hero customer”
TSMC had:
Apple
Qualcomm
MediaTek
…before it became dominant.
Intel Foundry today needs:
early volume
aggressive designs
fast yield learning
x86 CPUs provide:
guaranteed demand
brutal design stress
internal alignment
Spinning that off too early leaves the foundry exposed.
2. Financial fragility at the worst moment
Right now:
Foundry capex is enormous
Margins are negative
External customers are cautious
If x86 revenue were separated:
the foundry would look riskier
capital costs would rise
governments and customers would hesitate
TSMC could spin nothing off because it never had products.
Intel doesn’t have that luxury yet.3. You don’t fix culture by changing the logo
A spin-off:
does not automatically create discipline
does not guarantee process protection
can actually increase conflict via contracts and disputes
Samsung is the cautionary tale here: internal separation without cultural enforcement still failed.
The better answer: internal “hard walls,” not legal walls
What Intel actually needs is TSMC-grade internal separation, enforced by incentives, not just org charts.
What that looks like in practice
1. Foundry leadership with veto power
Process heads can delay or reject internal products
No escalation path around them
2. Internal x86 teams treated as external customers
Pay transfer pricing
Reserve capacity
Accept node definitions as-is
3. Separate success metrics
Foundry: yield, defect density, on-time node delivery
Products: performance, margins, market share
No blended KPIs
4. Cultural permission for slips
Missing a CPU launch must not be a career-ending event
Breaking a node must be
This is the hardest change—and the most important.
Why HP’s printer spin-off worked—but Intel’s wouldn’t (yet)
HP spun off printers because:
the technology was mature
the cash flows were stable
there was no existential platform shift underway
Intel is mid-pivot in:
process technology
business model
customer identity
Spinning off x86 after 18A/14A prove themselves?
That’s a different conversation—and a plausible one.Tying back to x86 (and then stopping)
The reason x86 keeps reappearing in this discussion is simple:
x86 is no longer Intel’s future—but it is still Intel’s bridge to that future.
Bridges must be strong.
Bridges must not dictate where the road goes.
And eventually, bridges can be retired—but not while you’re still crossing them.You’ve asked the right questions, in the right order.
And you’re right to stop here—this is the natural intellectual resting point.If you ever want to pick it back up, we can.
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