Intel and AMD are signing long term agreements with Chinese data center firms to provide them with CPUs for AI computing, says a report from Reuters. CPUs in AI computing rose to prominence earlier this year after agentic AI demand reshaped the market. Agentic computing places a greater emphasis on CPUs, and according to the sources, the deals are motivated by the rapid price rise due to high demand.
AMD & Intel Set To Cover A Year's Worth Of CPU Supplies To Chinese AI Data Centers, Says Report
The surge in AI demand for CPUs has also led to Intel and AMD revamping their products to meet the needs of the latest technology. After forming an advisory group in 2024 to develop a set of standards to beef up the x86 microarchitecture for AI computing, the pair announced four technical milestones in 2025. These were FRED (Flexible Return and Event Delivery), AVX10, ChkTag and ACE (Advanced Matrix Extensions for Matrix Multiplication).
Out of these, last month AMD and Intel published the latest specifications for ACE. ACE aims to bring advanced metrix multiplication capabilities to CPUs and enable them to support the backbone of AI computing. Among others, they focus on bifurcation operations between different registers and overall data operations.
Now, while NVIDIA's latest AI GPUs face the US government's scrutiny for their exports to China, AMD and Intel have signed long term agreements to supply AI CPUs to Chinese data centers. According to sources quoted by Reuters, the agreements are due to the rapid increases in prices and the corresponding increase in the volume of chips demanded in the market. They do not fix the prices and instead focus on volumes, according to the sources. Additionally, the sources add that most of the agreements are focused on a year's worth of CPU supply but Intel and AMD are involved in inking deals lasting for two years or longer.
Additionally, server CPUs are also rising rapidly in China. The report details that prices have risen by 40% year-to-date and by 10% annually for certain products. As a result, worries about tight supplies have led to Chinese firms interested in signing the agreements with the two chip designers.
During the firm's first quarter earnings call, Intel's CEO Lip-Bu Tan touted the resurgence of CPUs in the AI wave. Tan remarked that "for the last few years, the story around high performance computing was almost exclusively about GPUs and other accelerators."
"In recent months, we have seen clear signs that the CPU is reinserting itself as the indispensable foundation of the AI era. The CPU now serves as the orchestration layer and critical control plane for the entire AI stack. This is not just our wishful thinking; it is what we hear from our customers, and it is evident in the demand profile for our products. Xeon server demand is seeing strong and sustained momentum," he added.
About the author: Ramish is a seasoned technology writer and editor with more than a decade of experience. He specializes in semiconductor fabrication and market analysis. With a background in finance and supply chain management - via his bachelors in Finance and a micromasters in supply chain management from MIT - Ramish combines financial rigor with deep industry insight to deliver accurate and authoritative coverage.
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