Intel's upbeat revenue projections on Thursday (Oct 31) masked a sore point for the embattled company: chips touted for artificial intelligence have not lived up to sales expectations.

The chipmaker scrapped its recent forecast that in 2024 it would sell more than US$500 million (S$662 million) worth of Gaudi accelerator chips, so called because they speed up the performance of AI applications.

In a call with analysts, CEO Pat Gelsinger attributed their slower uptake to software related to Gaudi and a recent transition from the second to third generation of the chip.

While the upbeat total revenue forecast pushed up Intel shares by about five per cent in early trading on Friday, its stock remains more than 50 per cent lower for the year as the chipmaker misses out on the AI boom and struggles with a turnaround.

The Gaudi disappointment underscores Intel's persistent AI travails, years after it declined to pick one strategy that could counter its skyrocketing rival Nvidia. It also shows challenges Intel has faced in delivering on a promise to investors.

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