They are CPU chiplets. Holthaus says that in the earnings call.
Intel said they are using TSMC N2 in the call?
I was told by Intel people that they are being pushed to 18A with BSPD. TSMC N2 does not have BSPD
Where in the call?
Michelle Johnston Holthaus
Thank you, John, and let me add my welcome. It's been roughly two months since Dave and I stepped into our roles as interim co-CEOs. From day one, we have been working closely together alongside the board to drive better execution of our strategy. There are no quick fixes and we are committed to improving our performance and rebuilding our credibility through persistent hard work that delivers tangible results.
As part of this, we are driving more focused investments across the business. We cannot be all things to all people, and we are prioritizing areas where we can drive differentiated value. We are also continuing to simplify our business and become a leaner, more efficient company. And most of all, we are doing a better job of listening to our customers to ensure we meet their needs.
Q4 was a step in the right direction. We delivered revenue, gross margin, and EPS above our guide. Intel Products executed to drive revenue in the quarter even as PC inventory continued to normalize, and Intel Foundry drove incremental operating efficiencies while achieving key grant related milestones which supported solid upside to gross margins.
As co-CEOs, you can expect us to be very straightforward and direct. We only make commitments we are confident we can deliver. We firmly believe that what we say is not nearly as important as what we do and everything we do must be in service of our customers. Innovating to solve their most pressing challenges is the surest path to creating shareholder value.
This is the mindset I have brought to my position as the CEO of Intel Products. This is a great business with great people, partners, and IP to design world class products from edge to cloud. I take nothing for granted but I firmly believe that the core x86 architecture and the ecosystems we have built and invested in over the decades, create a solid foundation for success.
Our customers share this view, but they need us to improve our execution and hit our commitments. I am setting clear priorities and directions in each business to drive better outcomes. I think about Intel products in three buckets.
First, client, edge; second, traditional data center; and third, the AI data center. Let me spend a few moments on each. In client, Intel CPUs power roughly 7 out of every 10 PCs. This is a strong position that gives us advantages in the market that said the market is becoming more competitive, especially as we see new entrants trying to participate in the AI PC category.
Personally, I thrive on competition. It drives a healthy paranoia across everything we do and we're using it as motivation to up our game even more. The success of Core Ultra across Meteor Lake, Arrow Lake, and Lunar Lake has established Intel as the market leader in AI PC CPUs. And we remain on track to ship more than 100 million cumulative systems by the end of 2025. We are innovating at scale unlike any of our competitors.
This was on display earlier this month at CES where we launched the enterprise versions of our AI CPUs with compelling new features to Intel vPRO. This is a testament to the strong ecosystem we have built with IT departments around manageability, security, trust, and brand, and we expect these investments to possession us well as corporations begin their migration to Windows 11.
Alongside our investments in enterprise, our ecosystem reach also positions us well in AI PC consumer markets. We are working with more than 200 ISBs across more than 400 features to optimize their software on our silicon. I'm excited about the new applications I'm seeing in the pipeline that will begin to proliferate over the coming months. Our goal is to innovate partner and fortify our position as the preferred CPU of choice.
Looking ahead to the rest of the year, we will strengthen our client roadmap with the launch of Panther Lake, our lead product on Intel 18A in the second half of 2025. As the first volume customer of Intel 18A, I see the progress that Intel Foundry is making on performance and yield. And I look forward to being in production in the second half as we demonstrate the benefits of our world class design and process technology capabilities.
2026 is even more exciting from a client perspective as Panther Lake achieves meaningful volumes and we introduced our next generation client family code named Nova Lake. Both will provide strong performance across the entire PC stack with significantly better costs and margins for us enhancing our competitive position and reinforcing our value proposition to our partners and customers.
Let me now turn to our traditional data center business. The team has made good progress towards strengthening our offerings and driving better, more predictable execution. This year is all about improving Xeon's competitive position as we fight harder to close the gap to competition.
The ramp of Granite Rapids has been a good first step. We are also making good progress on Clearwater Forest, our first Intel 18A server product, that we plan to launch in the first half of next year. All of this provides a strong foundation on which to build as we execute.
The world's data center workloads still primarily run on Intel silicon. And we have a strong ecosystem especially within enterprise. We are going to leverage these strengths as we work to stabilize our market share in 2025. One of the ways we'll do this is by reengaging the x86 ecosystem.
We have seen a positive response from the x86 Ecosystem Advisory Group we formed last fall, and we are encouraged by the enthusiasm for building both semi-custom and custom products. This is a big area of opportunity for the business, and we look forward to talking more about this as we have news to share.
Turning to the AI data center, I will start by saying that this is an attractive market for us over time, but I am not happy with where we are today.
On the one hand, we have a leading position as the host CPU for AI servers. And we continue to see a significant opportunity for CPU based inference on prem and at the edge as AI infused applications proliferate.
On the other hand, we're not yet participating in the cloud-based AI data center market in a meaningful way. We have learned a lot as we have ramped Gaudi, and we are applying those learnings going forward.
One of the immediate actions I have taken is to simplify our roadmap and concentrate our resources. Many of you heard me temper expectations on Falcon Shores last month. Based on industry feedback, we plan to leverage Falcon Shores as an internal test chip only without bringing it to market. This will support our efforts to develop a system level solution at rack scale with Jaguar Shores to address the AI data center.
More broadly, as I think about our AI opportunity, my focus is on the problems our customers are trying to solve. Most notably bid to lower the cost and increase the efficiency of compute. AI is not a market in the traditional sense. It's an enabling application that needs to span across the compute continuum from data center to the edge as such a one size fits all approach will not work.
And I can see clear opportunities to leverage our core assets in new ways to drive the most compelling total cost of ownership across the continuum. Before I turn the call over to Dave, let me close by speaking of Intel Foundry's largest way for customer.
I have a pretty simple approach. When we are able to combine world class products with world class process technology, we win. As CEO of Intel Products, I will always make process technology decisions based on what is best for my customers. And Intel Foundry will need to earn my business every day just as I need to earn the business of my customers.
Having said that I'm confident in Intel Foundry team ability to support my current and future product roadmap. And I'm excited to do more business with them as their process technology continues to advance. A stronger Intel Products combined with a more competitive Intel Foundry is a recipe for success for Intel overall.
Dave over to you.
Answering a question while not answering a question is a fine skill.