Shares of Intel are surging before the opening bell after the chipmaker said its foundry business would make some custom artificial intelligence chips for Amazon Web Services as it attempts to reinvigorate its business.

Intel CEO Pat Gelsinger informed employees that the company is transforming its foundry arm into an independent subsidiary, confirming insider leaks from August. According

Intel Corp. has made a raft of announcements over the past 24 hours in an effort to prove that a turnaround for the troubled chipmaker is starting to bear fruit.

The two companies will co-invest in making "fabric chips" that will be built in a new factory under construction outside Columbus, Ohio.

The most significant transformation of Intel in over four decades” includes $10 billion in cost cutting and foundry business spinoff.

EDT, Intel shares were at $21.62, up $0.70 or 3.37 per cent. On Monday, Intel shares had gained 6.4 per cent. The deal provides some respite to Intel's investors as the chipmaker’s shares had fallen nearly 60 per cent this year.

The partnership, which the companies describe as a multi-year, multi-billion-dollar co-investment, comes as Intel continues to build out its $28 billion chip manufacturing complex in New Albany.

Intel shares jumped 7% before the bell on Tuesday, as a chip-making deal with Amazon's cloud business provided a major stamp of approval for its struggling contract manufacturing business. The chipmaker will build custom AI chips for Amazon Web Services (AWS) as part of the multibillion-dollar deal.