Intel saw its server CPU sales drop again in 2024, continuing a slide that began in 2022. As Sravan Kundojjala of SemiAnalysis points out on X (formerly Twitter), this is the second year in a row that Intel’s foundry has experienced crushingly-low server chip volume. With Intel’s interim co-CEO and Products CEO Michelle Johnston Holthaus taking an “earn my business” approach to Intel Foundry for chips and AMD seeing success with its Epyc CPUs, 2025 looks like another challenging year for Intel’s server CPU business.
AI is part of the problem for Intel. According to Tom’s Hardware, cloud computing played a big role in Intel’s server CPU sales in previous years. Now, as AI is exploding onto the scene, GPUs and dedicated AI accelerators are playing a bigger role in the past, with servers often running more GPUs than CPUs. It’s worth noting, though, that Intel’s Data Center and AI (DCAI) group improved revenue by $182 million from its 2023 revenue for the segment.
“Server ASPs increased 12% from 2024, primarily due to a higher mix of high core count products,” Intel wrote in its Form 10-K report (PDF). “Server volume decreased 10% from 2023, due to lower demand in a competitive environment and a higher mix of high core count products.”
AMD poses a bigger threat to Intel than it has in the past, thanks to its AI hardware. AMD’s Epyc processors and Instinct GPUs delivered a 122% year-over-year sales increase from 2023 to 2024, putting AMD in the top spot of the data center space segment for the first time ever. At the time, we noted that the large price gap may have contributed to AMD’s progress in the market. With new tech that performed well for AI training and other data center needs at lower prices than Intel Xeon’s, AMD had a compelling argument for purchasers.
Credit: AMD
Intel kicked off 2025 by addressing the price issue. It recently lowered the prices of certain Xeon processors in what appears to be a move to narrow the price gap between Xeon and Epyc. Prices dropped by as much as 30% in January, upping the pressure on AMD. The lower prices might bring some buyers back to Intel’s side, but the effect on margins could be substantial. It’s shaping up to be interesting year for Intel’s new CEO.