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Intel has decided to retain its networking and communications (NEX) unit rather than proceed with a sale after completing an internal evaluation of strategic options for the division. The move reverses earlier consideration of spinning out or selling the business, as the company believes it can extract more money selling actual products or platforms rather than as a business unit.
"After a thorough review of strategic options for NEX—including a potential standalone path—we determined the business is best positioned to succeed within Intel," an Intel spokesperson told 3DTested in a statement. "Keeping NEX in-house enables tighter integration between silicon, software and systems, strengthening customer offerings across AI, data center, and edge. We remain focused on delivering for customers and creating long-term value."
Although NEX is certainly less known than Intel's CPUs for client or data center computers, as well as some other products that carry the five-letter badge, the unit is one of the crown jewels in Intel's portfolio.
Intel's NEX develops and builds processors for networking and edge, infrastructure processors (IPUs), Ethernet controllers, Wi-Fi controllers, switching gear, and programmable connectivity hardware used in a wide range of applications, starting from humble PCs and client systems all the way to telecom infrastructure and data centers. In addition to hardware, NEX has a significant software portfolio that runs on this equipment to handle traffic scheduling, security features, and remote administration.
When Intel sells a CPU for a PC, it can bundle it with an Ethernet and/or Wi-Fi controller, whereas a data center Xeon processor can be bundled with three Ethernet chips, an IPU, and accompanying software, maximizing Intel's content and earnings per system. Given Intel's woes in client and data center markets, NEX is barely growing, so selling it off could have potentially provided Intel with billions of much-needed cash.
However, after Intel secured a financing package that includes $8.9 billion from the U.S. Government in exchange for an 8.9% take, plus $2 billion from SoftBank Group and $5 billion from Nvidia, Intel concluded that keeping the NEX unit delivers more value than a transaction at this stage.
Intel does not report NEX results separately: in Q1 2025, the company reorganized by integrating NEX into its Client Computing Group (CCG) and Data Center and AI (DCAI) segments, then updated its reporting structure accordingly. As a result, we do not know whether NEX remains a profitable unit. Yet, when Intel reported NEX results separately for the last time in Q4 2024, the unit generated $1.6 billion in sales and $300 million in operating income.
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Considering Nvidia's acquisition of Mellanox and AMD's acquisition of Pensando, it would be swimming in the other direction for Intel to spin out NEX. I think they really needed to keep it in-house, if at all possible. I'm not surprised they seem to have reached the same conclusion.
