Intel Corp. has scrapped plans to sell its multibillion-dollar NEX networking chip business.

The company announced the move on Wednesday in a statement issued to Tom’s Hardware. The reversal comes about six months after rumors first emerged that Intel had considered offloading NEX. The company confirmed the initiative in July, telling employees that it was hoping to sell a stake in the unit to outside investors.

“After a thorough review of strategic options for NEX — including a potential standalone path — we determined the business is best positioned to succeed within Intel,” the chipmaker stated. “Keeping NEX in-house enables tighter integration between silicon, software and systems, strengthening customer offerings across AI, data center, and edge. We remain focused on delivering for customers and creating long-term value.”

NEX delivered operating income of $931 million on $5.8 billion in revenue last year. Intel stopped breaking out the unit’s earnings in the first quarter, a few weeks before word emerged about its plans to sell the unit. NEX generates much of its revenue from supplying networking hardware for the data center, edge and consumer markets.

One of the newest additions to Intel’s lineup of network processors is the Atom x7000C chip series. It’s designed to power cost-efficient network appliances optimized for environments such as branch offices. Atom x7000C includes features that accelerate networking workloads such as VPP, a popular packet processing framework, and the OpenSSL traffic encryption tool.

The chips in the series also support a technology called TNS, or Time-Sensitive Networking. When a corporate network is congested, the technology transmits high-priority traffic first to ensure that it arrives on time. TNS spreads packets over multiple network links to prevent localized technical issues from disrupting the flow of data.

Intel also offers a line of chips called the Atom x7000RE series that is geared towards industrial devices. The series can be used to power, among other products, industrial gateways. Those are network devices optimized to process the traffic of internet-connected factory equipment. Similarly to the Atom x7000C series, Atom x7000RE chips support TNS.

Intel’s network portfolio addresses other use cases as well. The chipmaker provides Wi-Fi modules for consumer devices and Ethernet adapters, which are used to connect servers to the network of the data center in which they’re installed. The adapters support a technology called RoCE that offloads some network-related computations from a server’s main processor to improve performance.

Intel’s decision not to sell NEX may be related to the go-to-market model its rivals have adopted in the artificial intelligence market. 

Nvidia Corp. sells its graphics cards not only on a standalone basis, but also as part of AI appliances that include network equipment. Advanced Micro Devices Inc. plans to take a similar approach with its upcoming Helios system. The rack-scale machine will combine AI accelerators with AMD’s Pensando chips, which speed up networking tasks such as traffic encryption. Retaining ownership of NEX’s networking technology may make it easier for Intel to match its rivals’ capabilities if it decides to follow in their footsteps.

Earlier this year, the company sold a majority stake in another business unit called Altera to Silver Lake. The unit makes field-programmable gate arrays, processors that developers can customize for specific workloads to improve performance. The transaction valued Altera at $8.75 billion. 

Image: Intel