Despite rumors of its potential demise, evidence confirms that Xe3 is in development. Leaker @SquashBionic has stated that Intel still has plans for discrete GPUs (dGPUs) following Battlemage, saying, “they still have plans for dGPUs after Battlemage.”
Xe3 is expected to be part of Panther Lake, the successor to Arrow Lake, and tentatively included in the Core Ultra 300 lineup.
Additional confirmation of Xe3's development comes from a LinkedIn listing by an Intel engineer, described as the "lead project architect for Xe+, Xe3, and Xe3p GPU IP." The HWiNFO monitoring tool also added preliminary support for both Battlemage and Celestial GPUs since late last year, indicating significant progress.
Before Celestial's debut, the Battlemage lineup is expected to be announced, possibly as early as this December. Recently, one of the Battlemage SKUs was spotted in shipping manifests, suggesting that more information will be available soon from both official channels and leakers.