Intel has struck a significant multibillion-dollar deal with Amazon Web Services (AWS) to produce custom AI chips, including an 'AI fabric chip' using Intel's advanced 18A process and custom Xeon CPUs using the Intel 3 process. This partnership, which expands their existing collaboration, aims to boost Intel's beleaguered foundry business and includes a $7.8 billion investment by Amazon in its Ohio data center operations. This announcement comes amid a broader strategy by Intel to restructure and rebound from recent financial struggles, including potential US government funding and cost-cutting measures. Intel's CEO, Pat Gelsinger, emphasized the importance of this deal in a memo, which also led to an 8% rise in Intel's stock. Ohio Governor Mike DeWine highlighted the collaboration as a significant development for US-based manufacturing and AI leadership.