Intel Corporation (NASDAQ:INTC) shares are trading higher Thursday after the company announced a multiyear collaboration with Alphabet Inc. (NASDAQ:GOOG)‘s Google to advance the next generation of AI and cloud infrastructure.

AI Infrastructure Partnership

Intel and Google said the collaboration will focus on advancing AI and cloud infrastructure, with Intel's Xeon processors continuing to power Google Cloud workloads across AI, inference and general-purpose computing.

The companies will align across multiple generations of Intel Xeon processors to improve performance, energy efficiency and total cost of ownership across Google's global infrastructure.

Expansion Of Custom IPUs

As part of the agreement, Intel and Google are expanding co-development of custom ASIC-based infrastructure processing units (IPUs), designed to offload networking, storage and security tasks from CPUs.

The companies said IPUs can improve utilization, increase efficiency and enable more predictable performance across large-scale AI environments.

Focus On Scalable AI Systems

Intel said the collaboration reflects a broader shift toward more complex, heterogeneous AI systems, where CPUs and specialized accelerators work together to deliver performance and scalability.

CEO Lip-Bu Tan said, "Scaling AI requires more than accelerators – it requires balanced systems. CPUs and IPUs are central to delivering the performance, efficiency and flexibility modern AI workloads demand."

Google's AI infrastructure lead Amin Vahdat added that Intel's Xeon roadmap supports the company's ability to meet growing performance and efficiency needs.

Intel Shares Pop

INTC Price Action: At the time of publication, Intel shares are trading 0.73% higher at $59.38, according to data from Benzinga Pro.

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