Intel Eyes $1 Billion Software Milestone by 2027 Amid AI and Cloud Expansion

Financially speaking, Intel's (NASDAQ: INTC) venture into the software sector is paying off handsomely. According to Intel’s Chief Technology Officer Greg Lavender, the company is on track to hit a cumulative software revenue milestone of $1 billion by the close of 2027. Lavender, who joined Intel from VMware (NYSE: VMW) in 2021, has been instrumental in this pivot, with software revenue breaching the $100 million mark that year alone.

Since then, Intel has not just rested on its laurels but actively acquired three additional software firms to bolster its strategy. Lavender is confident, stating, "I aim to hit $1 billion in software and developer cloud subscription revenue. I think I will reach this by the end of 2027, if not sooner."

For context, Intel generated $54 billion in revenue in 2023. The company provides various software services, including cloud computing and artificial intelligence (AI). Lavender’s strategy zeroes in on three critical areas: AI, performance, and security.

Moreover, Intel is witnessing substantial interest in its upcoming Gaudi 3 chip, which Lavender believes could position the company as the runner-up in the AI chip market. Despite being overshadowed by Nvidia's (NASDAQ: NVDA) dominance—holding approximately 83% of the data center chip market in 2023—both Intel and Advanced Micro Devices (NASDAQ: AMD) are making strides to narrow the gap.

Lavender disclosed that Intel is doubling on open-source initiatives to create versatile software and tools for a broad spectrum of AI chips, signaling potential advancements soon. In contrast, Nvidia’s success is often attributed to its proprietary CUDA software, a key factor in retaining developers within its ecosystem. However, Nvidia now faces scrutiny from France’s antitrust regulator over suspected anti-competitive practices tied to CUDA's influence in the generative AI sector.

Intel is actively participating in the UXL Foundation, a collaborative effort among tech companies to create open-source software that can run on any hardware. The consortium features notable members like Qualcomm (NASDAQ: QCOM), Samsung Electronics (KS: 005930), and Arm Holdings (NASDAQ: ARM).

Additionally, Intel is contributing to Triton, a project spearheaded by OpenAI that aims to develop an open-source programming language to optimize code efficiency across various AI chips. Supported by AMD and Meta (NASDAQ: META), Triton is already operating on Intel’s current GPUs and is poised to run on forthcoming AI chips.

"Triton is going to level the playing field," Lavender asserted.