Intel president Paul Otellini unveiled the initiative, codenamed LaGrande Technology, at the Intel Developer Forum.
"If we are going to enable convergence, if we are going to enable the promise of e-business, we have to be able to have a more secure environment," Otellini said. "Hardware strengthening to this is critical."
According to Intel, LaGrande creates a safer computing environment by protecting data typed into a keyboard, displayed on a monitor and stored in memory.
"LaGrande delivers a hardware-based foundation for security," Otellini said. "It includes protected execution, protected memory and protected storage."
Otellini said Intel is working with privacy experts as well as its business partners to ensure that the company finds the best way to protect data.
He said LaGrande will work with Microsoft's Palladium security initiative, which was announced earlier this year. Palladium will marry hardware and software security inside every Windows PC.