It was quite a week for Intel.

The chipmaker, which has lost over half its value this year and last month had its worst day on the market in 50 years after a disappointing earnings report, started the week on Monday by announcing that it’s separating its manufacturing division from the core business of designing and selling computer processors.

And late Friday, CNBC confirmed that Qualcomm has recently approached Intel about a takeover in what would be one of the biggest tech deals ever. It’s not clear if Intel has engaged in conversations with Qualcomm, and representatives from both companies declined to comment. The Wall Street Journal was first to report on the matter.

The stock rose 11% for the week, its best performance since November.

The rally provides little relief to CEO Pat Gelsinger, who has had a tough run since taking the helm in 2021. The 56-year-old company lost its long-held title of world’s biggest chipmaker and has gotten trounced in artificial intelligence chips by Nvidia, which is now valued at almost $3 trillion, or more than 30 times Intel’s market cap of just over $90 billion. Intel said in August that it’s cutting 15,000 jobs, or more than 15% of its workforce.

But Gelsinger is still calling the shots and, for now, he says Intel is pushing forward as an independent company with no plans to spin off the foundry. In a memo to employees on Monday, he said the two halves are “better together,” though the company is setting up a separate internal unit for the foundry, with its own board of directors and governance structure and the potential to raise outside capital.

For the company that put the silicon in Silicon Valley, the road to revival isn’t getting any smoother. By forging ahead as one company, Intel has to two clear two gigantic hurdles at once: Spend more than $100 billion through 2029 to build chip factories in four different states, while simultaneously gaining a foothold in the AI boom that’s defining the future of technology.

Intel expects to spend roughly $25 billion this year and $21.5 billion next year on its foundries in hopes that becoming a domestic manufacturer will convince U.S. chipmakers to onshore their production rather than relying on Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung.

That prospect would be more palatable to Wall Street if Intel’s core business was at the top of its game. But while Intel still makes the majority of processors at the heart of PCs, laptops, and servers, it’s losing market share to Advanced Micro Devices and reporting revenue declines that threaten its cash flow.

Monday’s announcement on the new governance structure for the foundry business served as an opening salvo meant to convince investor that serious changes are underway as the company prepares to launch its manufacturing process, called 18A, next year. Intel said it has seven products in development and that it landed a giant customer, announcing that Amazon would use its foundry to produce a networking chip.

“It was very important to say we’re moving to the next phase of this foundry journey,” Gelsinger told CNBC’s Jon Fortt in an interview. “As we move to this next phase, it’s much more about building efficiency into that and making sure that we have good shareholder return for those significant investments.”

Still, Gelsinger’s foundry bet will take years to pay off. Intel said in the memo that it didn’t expect meaningful sales from external customers until 2027. And the company will also pause its fabrication efforts in Poland and Germany “by approximately two years based on anticipated market demand,” while pulling back on its plans for its Malaysian factory. 

TSMC is the giant in the chip fab world, manufacturing for companies including Nvidia, Apple and Qualcomm. Its technology allows fabless companies — those that outsource manufacturing — to make more powerful and efficient chips than what’s currently possible at volume inside Intel’s factories. Even Intel uses TSMC for some of its high-end PC processors.

Intel hasn’t announced a significant traditional American semiconductor customer for its foundry, but Gelsinger said to stay tuned.

“Some customers are reluctant to give their names because of the competitive dynamics,” Gelsinger told Fortt. “But we’ve seen a large uptick in the amount of customer pipeline activity we have underway.”

Prior to the Amazon announcement, Microsoft said earlier this year it would use Intel Foundry to produce custom chips for its cloud services, an agreement that could be worth $15 billion to Intel. Microsoft CEO Satya Nadella said in February that it would use Intel to produce a chip, but didn’t provide details. Intel has also signed up MediaTek, which primarily makes lower-end chips for mobile phones.

Intel said this week that it received $3 billion to build chips for the military and intelligence agencies in a specialized facility called a “secure enclave.” The program is classified, so Intel didn’t share specifics. Gelsinger also recently met with Commerce Secretary Gina Raimondo, who is loudly promoting Intel’s future role in chip production.

Earlier this year, Intel was awarded up to $8.5 billion in CHIPS Act funding from the Biden administration and could receive an additional $11 billion in loans from the legislation, which was passed in 2022. None of the funds have been distributed yet. 

“At the end of the day, I think what policymakers want is for there to be a thriving American semiconductor industry in America,” said Anthony Rapa, a partner at law firm Blank Rome who focuses on international trade.

For now, Intel’s biggest foundry customer is itself. The company started reporting the division’s finances this year. For the latest quarter, which ended in June, it had an operating loss of $2.8 billion on revenue of $4.3 billion. Only $77 million in revenue came from external customers.

Intel has a goal of $15 billion in external foundry revenue by 2030.

While this week’s announcement was viewed by some analysts as the first step to a sale or spinoff, Gelsinger said that it was partially intended to help win new customers that may be concerned about their intellectual property leaking out of the foundry and into Intel’s other business.

“Intel believes that this will provide external foundry customers/suppliers with clearer separation,” JPMorgan Chase analysts, who have the equivalent of a sell rating on the stock, wrote in a report. “We believe this could ultimately lead to a spin out of the business over the next few years.”

No matter what happens on that side of the house, Intel has to find a fix for its main business of Core PC chips and Xeon server chips.

Intel’s client computing group — the PC chip division — reported about a 25% drop in revenue from its peak in 2020 to last year. The data center division is down 40% over that stretch. Server chip volume decreased 37% in 2023, while the cost to produce a server product rose.

Intel has added AI bits to its processors as part of a push for new PC sales. But it still lacks a strong AI chip competitor to Nvidia’s GPUs, which are dominating the data center market. The Futurum Group’s Daniel Newman estimates that Intel’s Gaudi 3 AI accelerator only contributed about $500 million to the company’s sales over the last year, compared with Nvidia’s $47.5 billion in data center sales in its latest fiscal year.

Newman is asking the same question as many Intel investors about where the company goes from here.

“If you pull these two things apart, you go, ‘Well, what are they best at anymore? Do they have the best process? Do they have the best design?'” he said. “I think part of what made them strong was that they did it all.”

— CNBC’s Rohan Goswami contributed to this report

WATCH: CNBC’s full interview with Intel CEO Pat Gelsinger

Elon Musk is on a mission to build new supercomputers. As the CEO of Tesla and his new artificial intelligence startup xAI, the tech titan has big plans for how artificial intelligence can help to supercharge his businesses.

In January, he wrote on X that Tesla should be viewed as an AI/robotics company rather than a car company. Tesla’s custom-built supercomputer named Dojo is key to this transformation. Tesla has said it plans to spend $500 million to build the supercomputer in Buffalo, New York. Tesla is also building another supercomputer cluster, called Cortex, at the company’s headquarters in Austin, Texas.

Dojo will process and train AI models using the large amounts of video and data captured by Tesla cars. The goal is to improve Tesla’s suite of driver assistance features, which the company calls Autopilot, and its more robust Full Self-Driving or FSD system. Subscriptions to Tesla’s FSD features cost $99 a month and include automatic lane changes, automatic parking and automatic stopping for traffic lights and stop signs.

“They’ve sold what is it, 5 million plus cars. Each one of those cars typically has eight cameras plus in it. And if you think then that those cars are driving around, let’s just say 10,000 miles a year on average, they’re streaming all of that video back to Tesla,” says Steven Dickens, chief technology advisor at the Futurum Group. “So what can they do with that training set? Obviously they can develop Full Self-Driving and they’re getting close to that.”

Despite their names, neither Autopilot nor FSD make Tesla vehicles autonomous and require active driver supervision, as Tesla states on its website. In the past, the company has garnered scrutiny from regulators who say that Tesla falsely advertised the capabilities of its Autopilot and FSD systems. But reaching full autonomy is critical for Tesla, whose sky-high valuation is largely dependent on bringing robotaxis to market, some analysts say.

The company reported lackluster results in its latest earnings report and has fallen behind other automakers working on autonomous vehicle technology. These include Alphabet-owned Waymo, which is already commercially operating fully autonomous taxis in several U.S. cities, GM’s Cruise and Amazon’s Zoox. In China, competitors include Didi and Baidu.

Tesla hopes Dojo, which Musk says has been running tasks for Tesla since 2023, will change that. A Tesla robotaxi event originally scheduled for August is now expected to occur in early October.

Dojo can also be useful for training Tesla’s humanoid robot, Optimus, which the company plans to use in its factories starting next year. Musk has said that Tesla plans to spend $10 billion this year on AI.

Musk is also betting on supercomputers to run his new AI venture xAI. Musk launched xAI in 2023 to develop large language models and AI products, like its chatbot Grok, as an alternative to AI tools created by OpenAI, Microsoft and Google.

Despite being one of its founders, Elon Musk left OpenAI in 2018 and has since become one of the company’s harshest critics. In June, it was announced that xAI would build a supercomputer in Memphis, Tennessee to train Grok. In early September, Musk revealed that a portion of the Memphis supercomputer, called Colossus, was already online.

To learn more about Elon Musk’s supercomputer plans, watch the video.

The Securities and Exchange Commission has asked a federal judge to sanction Elon Musk if he continues to violate the court’s order to appear for a deposition in a probe of his 2022 Twitter acquisition.

The SEC has been investigating whether Musk or anyone else working with him committed securities fraud in 2022 as the Tesla CEO sold shares in his automaker and shored up a stake in Twitter, ahead of his leveraged buyout of the company now known as X.

In May, the court ordered Musk to appear for a deposition by the financial regulators regarding the Twitter deal.

“Musk has now failed to appear before the SEC twice: first in September 2023, in defiance of a lawful administrative subpoena, and last week, in defiance of a clear court order,” SEC attorney Robin Andrews said in the Friday filing.

Andrews asked the judge to consider sanctions should Musk delay further, according to the filing.

“The Court must make clear that Musk’s gamesmanship and delay tactics must cease,” Andrews wrote.

The filing also revealed, in a footnote, that the SEC intends to ask the court to hold Musk in “civil contempt” for canceling a deposition on Sept. 10, giving the agency only a few hours notice that he would not appear. Musk’s cancellation cost the SEC time and money after it sent personnel to Los Angeles to depose him and he didn’t appear for the investigative interview, the agency said.

Musk’s deposition in the probe has been rescheduled for a date in early October at an SEC office, the filing said.

“Without further action by the Court, nothing deters Musk” from “simply failing to show up for that date,” Andrews wrote.

Musk’s attorney, Alex Spiro, a partner at Quinn Emanuel in New York, wrote in a response that “such drastic action would be inappropriate,” adding that the SEC and Musk had agreed rescheduling would be permissible in light of an emergency.

Additionally, Musk and his companies have “cooperated and are cooperating with the SEC in multiple other ongoing investigations,” Spiro wrote.

In a separate, civil lawsuit concerning the same Twitter deal, the Oklahoma Firefighters Pension and Retirement System has sued Musk in a federal court in New York accusing him of deliberately concealing his progressive investments in Twitter and intent to buy out the company.

The pension fund’s attorneys argue that Musk, by failing to clearly disclose his investments in and intentions to buy Twitter, had influenced other shareholders’ decisions and put them at a disadvantage.

Discovery from that case in New York yielded correspondence between an unnamed person at Morgan Stanley, and the executive who manages Musk’s money, Jared Birchall. In the messages, the Morgan Stanley contact wrote in February 2022 that Musk’s Twitter stock-buying strategy was closely held.

“No one knows what is going on and why but you and me,” the person at Morgan Stanley wrote. “Not compliance, not anyone.”

Read the court filing below: