Intel, $INTC, unveils new AI accelerator processor called Gaudi 3
Intel, $INTC, unveils new AI accelerator processor called Gaudi 3.
Intel announced at a company event on Tuesday that its updated processor, Gaudi 3, will be widely available in the third quarter. This chip is specifically designed to enhance performance in two crucial areas: aiding in the training of AI systems, which involves inundating them with data, and running the finalized software.
The surge in demand for AI services has led tech companies to seek out these so-called accelerator chips, with Nvidia reaping most of the benefits. Earlier versions of Gaudi did not achieve the market share gains Intel had hoped for, according to Chief Executive Officer Pat Gelsinger. He anticipates that the new model will have a more significant impact.
Gelsinger stated on Tuesday that while Nvidia is a strong competitor, there is a demand for an alternative. “The world needs more suppliers, and we’re quite dedicated to providing that choice,” he added.
Intel's shares were up less than 1% at $38 as of 1:33 p.m. in New York on Tuesday, reversing an earlier decline. They had fallen by 24% this year through Monday’s close.
Regarding pricing, Gelsinger declined to provide specifics but noted that his chips would be “a lot below” the cost of Nvidia’s current and future chips. He stated that they will offer an “extremely good” total cost of ownership.
Challenging Nvidia will be a difficult task. The remarkable success of Nvidia's H100 accelerator contributed to a revenue increase of more than double and propelled its market valuation over $2 trillion. Nvidia is now looking to build on its lead with a newly announced chip platform called Blackwell, with systems based on that product set to be available later this year, as announced by the company in March.
According to Intel's assessment, Gaudi 3 will be faster and more power-efficient than the H100. The chipmaker claims it will train certain types of AI models 1.7 times faster and be 1.5 times more effective at running the software. Intel stated that the product will be roughly on par with Nvidia’s newer H200, performing slightly better in some areas and slightly behind in others.
Intel, headquartered in Santa Clara, California, stated that it cannot provide comparisons with Nvidia’s upcoming Blackwell line until those products are publicly available. Advanced Micro Devices Inc., a longtime competitor to Intel in personal computer processors, is also entering the field with an accelerator lineup called MI300, unveiled in December.
Gelsinger has expressed that Intel is not merely trying to catch up with Nvidia. He believes that AI will bring a greater windfall for the industry, especially as the technology expands beyond its current concentration in the data centers of companies like Microsoft Corp. and Alphabet Inc.’s Google. Personal computers, mobile phones, and networking equipment will require chips capable of handling AI tasks and providing users with immediate feedback, which is not always feasible with remote server farms.
When Intel announced its fourth-quarter results in late January, Gelsinger stated that the company was increasing the supply of Gaudi to meet rising orders and that it has a "pipeline" for 2024 of "above $2 billion and growing." Intel cited market research indicating that the broader market for corporate spending on generative AI equipment will increase from $40 billion in 2024 to $151 billion in 2027.
However, this underscores Nvidia's substantial lead. The company generated data center revenue of over $47 billion in the 12 months ending in January. Analysts estimate that this total will surpass $95 billion in the current fiscal year.