Today James Altucher joins us again to reveal how the AI revolution is seeding the regeneration of an American icon…all part of the AI cornucopia of ideas and innovation that could also see another ‘thousand flowers bloom’. Enjoy!
Best wishes,
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Callum Newman,
Editor, Small-Cap Systems and Australian Small-Cap Investigator
*****
Why it’s China versus the US and the Taiwanese flashpoint
A seismic shift is transforming America’s technological landscape, and Intel Corporation (INTC) is spearheading the revolution.
The world is witnessing the emergence of a new kind of Cold War, measured not in megatons and missile gaps, but in nanometres and computing power.
As China races to achieve technological dominance and the US fights to maintain it, the global tech ecosystem is splitting along what we might call a ‘silicon curtain’.
The stakes are high, with more than 90% of the world’s advanced chips currently manufactured by Taiwan Semiconductor Manufacturing Company (TSMC).
This threat represents both a strategic vulnerability and an extraordinary opportunity for Intel.
The world received a stark reminder of this vulnerability earlier this year when a powerful 7.4 magnitude earthquake struck the island of Taiwan.
While TSMC emerged relatively unscathed, the incident highlights the precarious nature of the global semiconductor supply chain.
The AI opportunity
As artificial intelligence reshapes the technology landscape, demand for advanced chips has never been higher.
The global AI semiconductor market conservatively projected to reach $250 billion by 2028, represents one of the largest growth opportunities in Intel’s history.
This exponential growth is driven by the proliferation of large language models, generative AI, and the increasing adoption of AI across industries from healthcare to autonomous vehicles.
While Nvidia currently dominates the AI chip market with a commanding 90% share, Intel is making strategic moves to capture some of this sector’s explosive growth.
Intel’s Gaudi 3 AI accelerator, for example, began shipping last year. It promises performance competitive with Nvidia’s offerings at a more attractive price point.
Early benchmarks suggest Gaudi 3 can deliver twice the performance per dollar compared to Nvidia’s H100, particularly in training large language models.
The timing of Gaudi 3’s release was particularly fortuitous since it coincided with reported delays in Nvidia’s Blackwell launch and ongoing supply constraints in the high-end AI chip market.
But Intel’s AI push isn’t just about competing in the high-end accelerator market.
The company is building AI capabilities across its entire product line, from consumer PCs to data centre processors.
The company’s AI PC initiative aims to bring dedicated neural processing units (NPUs) to mainstream computing, enabling local AI processing for enhanced privacy and reduced cloud dependency.
In the red-hot data centre sector, Intel’s Xeon processors with built-in AI acceleration are gaining traction among customers who want to run AI workloads on their existing infrastructure.
The path forward
Intel must execute flawlessly on its technological roadmap while simultaneously transforming itself into a leading-edge foundry.
The signs so far are promising, with Intel consistently hitting its milestones and making accelerated progress on advanced manufacturing nodes that have surprised even optimists.
The company’s manufacturing expertise, built over decades of innovation, provides a foundation for this ambitious transformation.
The ongoing construction of new chip fabs in the U.S. represents more than just another factory, it’s a symbol of American technological renewal.
In Ohio, the new 1,000-acre campus will become the largest private-sector investment in state history, creating thousands of high-paying jobs and establishing a new silicon heartland in the American Midwest.
With the potential investment reaching US$100 billion, this facility could become the epicentre of advanced chip manufacturing in the Western world.
The project’s scale and ambition reflect Intel’s commitment to rebuilding American manufacturing capabilities.
Innovation at the atomic scale
Intel’s focus isn’t just on building factories — it’s on pushing the boundaries of what’s possible in semiconductor manufacturing beyond the upcoming 18A process computer chips.
The company’s research into next-generation materials and architectures, including new transistor designs, quantum computing technology, and exotic materials with superior properties, positions it to maintain technological leadership well into the future.
By the end of this decade, Intel aims to produce chips containing a trillion transistors each — an achievement that would revolutionise computing capabilities.
With the size of the opportunity, Intel’s current valuation could be a great entry point into what could become one of the most significant transformations of our time.
The company’s combination of technological expertise, government backing, and strategic positioning creates a unique value proposition at current prices.
While Wall Street often focuses on quarterly metrics, Intel’s transformation represents a multiyear journey toward technological and manufacturing leadership.
A trillion-dollar vision
The vision of Intel reaching a trillion-dollar valuation by 2030 isn’t just ambitious, it’s achievable.
For this to happen, Intel will need to keep executing. It has to reclaim leadership in making the world’s most powerful chips at scale and acquire foundry customers.
It needs to capture a meaningful share of the AI chip market and capitalise on the shift toward domestic manufacturing.
While each of these represents a challenge, Intel is demonstrating that it can execute.
Best,
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James Altucher,
Editor, Investment Network Australia
*****
Murray’s Chart of the Day
— Hang Seng vs Chinese Tech
Chinese technology stocks under pressure
The chart above shows you the relative moves between the Hang Seng Index and the Chinese Technology Index since the low of the last major correction in October 2022.
There is clearly a high correlation between the two with technology stocks leading the charge and outperforming the Hang Seng just as the Nasdaq outperforms the S&P 500.
Notice the recent spike and failure in October 2024, where the technology index jumped above the previous high from January 2023 and then quickly failed to carry on. A false breakout.
That false breakout led to a sharp decline in the technology index and the Hang Seng which lasted three months.
Recent price action saw yet another attempted breakout above the October 2024 high which appears to be failing. Are we about to see another false break emerge which could see sharp declines and months of selling?
Regards,
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Murray Dawes,
Editor, Retirement Trader and Fat Tail Microcaps
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