Intel revealed a pair of artificial intelligence chips on Tuesday as it seeks to improve its data center business and steal market share from rivals AMD and Nvidia. The new chips, the Xeon 6 CPU and Gaudi 3 AI accelerator promise improved performance and power efficiency and come when Intel is trying to prove it has what it takes to be a significant player in the AI space. Intel says the new Xeon 6 chip offers P-cores, or performance cores, and features twice the performance of its predecessor.
Built for AI and high-performance computing scenarios, including edge and cloud systems, the Xeon 6 aims to enhance overall productivity in various applications. The Gaudi 3 processor, on the other hand, is purpose-built for generative AI applications and will compete directly with Nvidia’s H100 and AMD’s MI300X line of chips. Intel stated that IBM is using its Gaudi 3 accelerators as part of its IBM Cloud to offer a lower overall total cost of ownership.
Demand for AI is leading to a massive transformation in the data center, and the industry is asking for choice in hardware, software, and developer tools,” Justin Hotard, Intel’s executive vice president and general manager of its Data Center Artificial Intelligence Group, said in a statement. With our launch of Xeon 6 with P-cores and Gaudi 3 AI accelerators, Intel is enabling an open ecosystem that allows our customers to implement their workloads with greater performance, efficiency, and security.”
Despite these advancements, Intel’s chips face significant competition. Nvidia’s line of AI chips has been in high demand, soaring the company’s stock price.
Nvidia’s stock price is up a staggering 142% year to date, while Intel shares have fallen by 52%. AMD shares have risen by 12% in the same period.
Intel’s new data center chips
During its latest quarterly earnings report in August, Intel reported worse-than-anticipated revenue and earnings per share, providing a disappointing outlook for its current quarter. The company also announced cutting 15% of its workforce and suspended dividend payments. Gelsinger is attempting to return Intel to its former glory by pushing its teams to build more advanced chips for data centers and consumer PCs, while simultaneously building out its manufacturing capabilities.
Intel hopes to dramatically expand its chip fabs, the facilities where it produces chips, both in the US and abroad. However, the company announced last week that it would put construction of planned plants in Europe on hold and delay its advanced packaging plant in Malaysia until demand for chips picks up. Intel has also signed deals to produce custom chips for Amazon, joining Microsoft as another significant client for its nascent third-party chip manufacturing business.
The firm stated it is separating its foundry segment from its design business to provide a more precise separation between the two entities, giving potential customers greater peace of mind. Despite these efforts, Intel’s turnaround struggles have made it a takeover target for Qualcomm, which could use Intel to significantly expand its chip business into the data center and PC markets. Qualcomm, which relies heavily on its smartphone segment, has been looking for new growth opportunities as smartphone sales have slowed.
One such opportunity involves building laptop chips that rival Intel’s own line of processors. However, it will take time for Qualcomm to potentially chip away at Intel’s PC market share.
