Shares of Intel Corp. $INTC led the Dow lower Tuesday as concerns about data center inventories overshadowed the announcement of new computer chips with artificial intelligence capabilities in time for the holidays.

Shares of Intel (INTC), which had been declining as CEO Pat Gelsinger began his keynote address at the Intel Innovation 2023 developer conference, began to fall during the session and ended down 4.3% at $36.34, making it the worst-performing stock on the Dow Jones Industrial Average on Tuesday. Intel shares rose 0.5% after the close of trading.

In the keynote, Gelsinger said Intel will unveil its Core Ultra processors - or the company's long-awaited "Meteor Lake" chip - that use Intel's first integrated neural processing unit, which is designed to provide "energy-efficient artificial intelligence acceleration and local inference in computing." Intel will also launch its fifth-generation Intel Xeon server processors, both of which will be available on 14 December.

Gelsinger said Core Ultra will enable AI inference on devices without the need for an internet connection, while preserving the user's local data on the computer. "Inferencing" in AI involves a machine learning model using data it already has to make a prediction or create a new answer based on a user request.

In generative AI models like OpenAI's ChatGPT, any data a user enters into the model automatically becomes part of it and is stored on cloud servers - as Samsung Electronics Co. found out earlier this year when engineers entered their own data into ChatGPT.

As the frenzy around artificial intelligence has grown over the past year, Intel has had to divert attention away from rival chipmakers, which have been largely seen as the No. 1 and No. 2 beneficiaries of the AI wave: Nvidia Corp. (NVDA) and Advanced Micro Devices Inc. (AMD).

Nvidia announced AI chips back in March, with CEO Jensen Huang predicting AI revenue would grow from "tiny, tiny, tiny" to "quite large" within a year, and blew Wall Street out of the water in its latest earnings report, when it reported data center revenue for the quarter that beat analysts' estimates by more than $2 billion, and predicted total revenue for the third quarter that was more than $3 billion higher than the consensus estimate.

AMD, meanwhile, came out with an announcement of its artificial intelligence products in June, focusing on open-source AI as opposed to Nvidia's proprietary software approach.

Later in the day, Intel CFO David Zinsner told analysts that although Intel has seen an improvement in data center demand over the past two quarters, the company still has several quarters to go "before we get to a good place for the stock."

"But I think we're poised for a decent year," Zinsner said, adding that inventories "will gradually come down in the second half of the year."

"We're going to have the kind of volatility, or whatever it is, or air pocket in the business that we're seeing right now," Zinsner said. "I think that will go away as we finish 2023, and 2024 should be a really good year for the data center business."

Earlier this month, Zinsner said one of the big surprises this year was Intel's better-than-expected data center sales, which followed a quarter in which the chipmaker posted its biggest quarterly loss ever.

Back in June, one Wall Street analyst justified Intel's "significant opportunity in artificial intelligence." On the other hand, Intel was also the worst-performing stock within the Dow for two consecutive days in June as the company broke news about its foundry services.