Intel has decided to abandon plans to spin off or sell its Networking and Edge Group (NEX), choosing instead to keep the business as part of the company despite its declining market position. The move marks a notable shift from earlier signals that the unit was headed for separation.

Since taking the helm, CEO Lip-Bu Tan has emphasized streamlining Intel’s portfolio by shedding operations considered outside the company’s core focus. Among the candidates for divestment, NEX stood out as the largest and most advanced in the process. However, after evaluating strategic alternatives over several months, Intel concluded that keeping the group internally made more sense. The company has not disclosed whether the reversal was driven by insufficient buyer interest or a reassessment of long-term priorities.

In a statement provided by an Intel spokesperson, the company described the decision as intentional and forward-looking, underscoring the importance of networking technologies to Intel’s broader data center ambitions. Intel now views networking as a key pillar in its push toward delivering integrated platforms and end-to-end systems rather than isolated components.

Intel reinforced that position in an official announcement, stating that internal ownership of NEX allows for deeper coordination across hardware, software, and system design. According to the company, this tighter alignment strengthens its offerings in areas such as artificial intelligence, cloud infrastructure, and edge computing, ultimately improving value for customers and shareholders.

As part of this realignment, select assets and personnel from NEX will transition into Intel’s Central Engineering Group, which is overseen by senior vice president Srini Iyengar. The goal is to better integrate networking expertise into Intel’s core engineering roadmap.

The decision contrasts sharply with plans outlined earlier this year. In July, NEX head Sachin Katti circulated an internal memo detailing steps toward creating an independent networking and communications company. At the time, industry observers widely believed a spin-off was imminent.

Market analysts note that while NEX remains strategically relevant, its competitive position has weakened. According to IDC, Intel’s share of the overall semiconductor market fell to 6.8% in the third quarter of 2025, down from 7.4% in 2024 and 9.2% in 2023. IDC research director Jim Hines declined to comment on whether Intel struggled to attract buyers but acknowledged the business has lost momentum.

Hines characterized Intel’s decision to retain NEX as a long-term positive, suggesting that the company’s improving financial outlook may have reduced pressure to sell assets. Since Tan assumed leadership, Intel has focused heavily on execution and balance sheet stability. While divesting NEX initially aligned with that strategy, recent funding commitments from the US government, Nvidia, and SoftBank appear to have eased the need for asset sales as a source of capital.

Together, these factors seem to have prompted Intel to rethink its earlier plan, opting instead to fold networking more deeply into its future platform strategy rather than letting it stand alone.