Intel Cancels Plan to Spin Off NEX Networking Chip Business

Intel has decided not to sell its multi-billion-dollar NEX networking chip business.

The company announced this reversal in a statement released on Wednesday, as reported by Tom’s Hardware. The move comes roughly six months after initial rumors surfaced that Intel was considering divesting the NEX unit. In July, the company confirmed those plans and informed employees of its intention to sell a stake in the division to external investors.

“After a comprehensive review of strategic alternatives for NEX—including potential paths to independence—we have concluded that the business is best positioned for success within Intel,” the chipmaker stated. “Keeping NEX in-house enables tighter integration across silicon, software, and systems, strengthening customer offerings in AI, data centers, and edge computing. We remain committed to serving our customers and delivering long-term value.”

Last year, NEX generated $5.8 billion in revenue and posted an operating profit of $931 million. Intel ceased disclosing the unit’s financial results separately starting in the first quarter, just weeks before news of a potential sale emerged. The majority of NEX’s revenue stems from networking hardware for data centers, edge infrastructure, and consumer markets.

Among the latest additions to Intel’s networking processor lineup is the Atom x7000C series, designed to deliver cost-effective support for network appliances in environments such as branch offices. These chips include hardware acceleration for key networking workloads, including the Vector Packet Processing (VPP) framework and OpenSSL for traffic encryption.

The Atom x7000C series also supports Time-Sensitive Networking (TSN), a technology that prioritizes high-priority data traffic during network congestion to ensure timely delivery. TSN achieves this by distributing packets across multiple network links, mitigating the risk of localized failures disrupting data flows.

Intel also offers the Atom x7000RE series, tailored specifically for industrial applications. These chips power devices like industrial gateways—networking appliances optimized for managing traffic from connected factory equipment. Similar to the x7000C line, the x7000RE processors also feature TSN support.

Beyond these segments, Intel’s networking portfolio spans additional use cases. The company supplies Wi-Fi modules and Ethernet adapters for consumer devices, as well as server-grade adapters that connect servers to their data center networks. These adapters support RoCE (RDMA over Converged Ethernet), a technology that offloads certain networking tasks from the server’s main CPU to improve overall performance.

Intel’s decision to retain NEX may be influenced by how its rivals are structuring their entries into the AI market.

NVIDIA, for instance, sells its GPUs not only as standalone components but also as part of integrated AI systems that include networking hardware. Similarly, AMD plans to bundle its upcoming Helios rack-scale system with its Pensando networking chips, which accelerate tasks like traffic encryption alongside AI accelerators. By keeping NEX in-house, Intel retains the flexibility to match such integrated offerings should it choose to follow a similar path.

Earlier this year, Intel did complete the sale of a majority stake in another business unit, Altera, to investment firm Silver Lake. Altera specializes in field-programmable gate arrays (FPGAs)—processors that can be customized for specific workloads to boost performance. That transaction valued Altera at $8.75 billion.