More Than a Rival
- Mark Rose
- 2 days ago
- 5 min read
Updated: 2 days ago
Why Tenstorrent is Both a Threat and a Lifeline for Intel's Great Recovery
Intel, the "fallen leviathan" of Silicon Valley, is in the midst of the most difficult maneuver in business: a full-scale, multi-hundred-billion-dollar corporate turnaround.1 This bet is not just about saving a company; it's a U.S. state-backed industrial policy to reclaim semiconductor leadership. The $100+ billion gamble, known as IDM 2.0, is Intel’s desperate response to a fundamental truth: the 50-year reign of the general-purpose microchip, an era Intel defined and dominated, is over.4
The old world was built on monolithic, one-size-fits-all CPUs that got predictably faster every two years.7 The new world, driven by the insatiable, generative workloads of AI, is being rebuilt on a new foundation of disaggregation, specialization, and open standards.9
This chaotic, creative destruction has triggered a Cambrian explosion of AI startups, all vying to unbundle the new king, Nvidia.11 In this sea of new competitors—Cerebras, Groq, SambaNova—one company, Tenstorrent, stands apart.11 Led by legendary chip architect Jim Keller, Tenstorrent is not just another "chip in the sea." It represents a unique and complex challenge for Intel.
To understand Intel's recovery, one must understand that Tenstorrent is simultaneously its direct competitor, its ideological opposite, and, paradoxically, its single most important potential customer.
The Collision Course: An Architecture War
On the surface, Intel and Tenstorrent are on a direct collision course. The competition is not just for market share, but over the fundamental architecture of computing.
Intel's entire empire was built on the proprietary x86 instruction set, a fortress it defended for decades.13 Tenstorrent is one of the most prominent champions of RISC-V, a free, open-source architecture that poses an existential, royalty-free threat to the closed, proprietary models of both x86 and ARM.14
This architectural war translates directly to a product war. Intel is desperately trying to gain a foothold in the AI accelerator market with its Gaudi chips and is building Neural Processing Units (NPUs) into its new PC chips to power the "AI-PC" revolution.16 Tenstorrent is attacking the exact same markets. Its "Wormhole" AI accelerators are sold as a direct, non-Nvidia alternative for data centers, and its core business model is to license its high-performance RISC-V CPU (Ascalon) and AI (Tensix) IP to others, enabling a new generation of custom chips for the very edge-computing and automotive markets Intel covets.18
If Intel's recovery plan was simply to re-establish dominance with its own x86 chips, Tenstorrent would be a clear and present danger—an open-source-wielding rebel at the gates.
If Intel's recovery plan was simply to re-establish dominance with its own x86 chips, Tenstorrent would be a clear and present danger—an open-source-wielding rebel at the gates.
But Intel's plan is far more radical.
The "Frenemy" Dynamic: Deconstructing IDM 2.0
Intel's "fallen leviathan" status forced it to make a choice it had avoided for 50 years: it blew up its own vertically integrated model.21 The IDM 2.0 strategy, now being executed with the help of over $7.8 billion in U.S. CHIPS Act funding, is a "house divided" on purpose.2
Intel Products: This division designs Intel's chips (like Core and Gaudi). It is now a "fabless" company, free to use the best manufacturing on Earth, even if that means giving its most advanced and critical business to its chief rival, TSMC.23
Intel Foundry Services (IFS): This is the new, "pure-play" foundry business. Its job is not just to serve Intel Products, but to compete head-to-head with TSMC and Samsung for external customers.22
This is the key. To survive, IFS must win. Its success is measured not by helping Intel's x86 chips, but by convincing the world's other chip designers to trust its factories. To prove it is serious, IFS has made a critical pledge: it is an open foundry, ready to build chips on any architecture, including ARM and, explicitly, RISC-V.22
Suddenly, Tenstorrent, the RISC-V rebel, looks less like an enemy and more like the ideal customer.
The Chiplet Bridge: Where Two Strategies Converge
The new computing era is not just defined by AI; it is defined by "chiplets." The monolithic "super-chip" is dead, killed by the physical limits of manufacturing.25 The future is a "system-in-a-package" built from smaller, specialized "Lego" bricks, or chiplets, all connected on a single package.26
This is the precise point where Intel's and Tenstorrent's strategies converge.
Tenstorrent's entire IP-licensing business is a chiplet business.18 It isn't just selling blueprints; it's offering its high-performance RISC-V CPU and AI cores as licensable "tiles" that other companies—in automotive, data centers, or consumer electronics—can integrate into their own custom chips.18 This is the "ARM of AI" model.
Intel, in a move of brilliant foresight, co-founded the open standard that makes this "Lego" model possible: the Universal Chiplet Interconnect Express (UCIe).26
Here, the "frenemy" dynamic becomes crystal clear. Tenstorrent is creating the market for open, licensable, RISC-V-based chiplets. Intel is building the factory (IFS) and the open-standard assembly line (UCIe) for that exact market.
Tenstorrent needs a leading-edge foundry to build its advanced chips and to serve the partners who license its IP. Intel desperately needs leading-edge customers to fill its new multi-billion-dollar fabs.
The Litmus Test for Intel's Recovery
Intel's $100 billion bet is not just on its technology; it's on its credibility. The entire turnaround hinges on proving that its new 18A process node is a real, high-volume, high-yield alternative to TSMC.28
To do this, it needs "marquee" customers. It has already had a major success, announcing at its 2025 Direct Connect event that rivals like Microsoft and Qualcomm have signed on as foundry customers.30 These are massive wins.
But landing Tenstorrent would be a different, more powerful signal.
Tenstorrent is the poster child for the new, open, disaggregated world. It is a direct architectural competitor to Intel's legacy business and a leader in the new AI chiplet economy. If Intel can convince Jim Keller—one of the world's most respected and skeptical chip architects—to build Tenstorrent's next-generation RISC-V chips on Intel's 18A process, it would be the ultimate validation of the IDM 2.0 strategy.
Tenstorrent is the poster child for the new, open, disaggregated world.
A "Tenstorrent AI chip, Built by Intel Foundry" would prove, in a single stroke, that Intel's manufacturing is back, its "anti-foundry" bias is dead, and its new "open" model is the future.21
Tenstorrent is, therefore, far more than "just another chip in the sea." It is the perfect litmus test for Intel's recovery. It is Intel's direct competitor in the processor market and, simultaneously, its most strategically important potential partner in the foundry war. How Intel navigates this complex relationship will be a critical indicator of whether the leviathan can, in fact, be reborn.
Footnotes
https://newsroom.intel.com/press-kit/us-chips-act-funding-intel
https://www.rev.com/transcripts/gtc-keynote-with-nvidia-ceo-jensen-huang
https://www.rev.com/transcripts/gtc-keynote-with-nvidia-ceo-jensen-huang
https://www.rcrwireless.com/20250327/fundamentals/ai-data-center-difference
https://www.avaq.com/technology/top-10-ai-chip-startups-to-watch-in-2025
https://yatharthsood.medium.com/the-duopoly-of-x86-331f13878085
https://www.eetimes.com/tenstorrent-productizes-risc-v-cpu-and-ai-ip/
https://newsroom.intel.com/corporate/intel-provides-update-on-internal-foundry-model
https://smart.dhgate.com/tsmc-intel-samsung-which-chipmaker-will-dominate-in-2025/