Intel Introduces New Chips to Compete with Nvidia and AMD in AI Market

Intel recently unveiled its latest line of computer chips, including Gaudi3, an artificial intelligence chip specifically designed for generative AI software. Set to launch next year, Gaudi3 will directly compete with similar chips from leading competitors Nvidia and AMD, both of which currently dominate the market for powerful and energy-intensive AI models. Nvidia’s GPUs are widely used in cloud-based AI models such as OpenAI’s ChatGPT. Due to this positioning, Nvidia stock has risen by an impressive 230% year-to-date, while Intel shares have experienced a more conservative 68% growth. As a response, both AMD and Intel have announced their own chips in an effort to challenge Nvidia’s stronghold in the AI market. On the announcement of Gaudi3, Intel’s stock rose by 2% on Thursday. Although specific technical details on Gaudi3 were not disclosed, this chip will directly compete with Nvidia’s H100 and AMD’s forthcoming MI300X, scheduled to ship to customers in 2024. Intel has been involved in the development of Gaudi chips since acquiring Habana Labs, a chip developer, in 2019. Intel CEO Pat Gelsinger expressed enthusiasm for generative AI, stating that it will be the main focus in 2023. Gelsinger added that he expects the AI PC to take center stage in the coming year. To complement this vision, Intel also unveiled the Core Ultra processors, which are specially designed for Windows laptops and PCs, offering enhanced AI capabilities.

In addition to Gaudi3, Intel introduced the Core Ultra processors, which are specifically optimized for Windows laptops and PCs. These processors come with a specialized AI component called an NPU, which accelerates AI programs, enabling faster processing. This announcement reflects a broader trend with major processor manufacturers, such as Intel’s competitors AMD and Qualcomm, aligning their product lines to meet the growing demand for AI models. Although Core Ultra processors may not provide the same level of power as Nvidia’s chips for running AI applications like ChatGPT without an internet connection, they are more than capable of handling smaller tasks. One notable example is Zoom’s background-blurring feature, which is efficiently run on Intel’s chips. Built using Intel’s power-efficient 7-nanometer process, the Core Ultra chips demonstrate Intel CEO Gelsinger’s commitment to catch up to Taiwan Semiconductor Manufacturing Company’s (TSMC) chip manufacturing capabilities by 2026. Moreover, the Core Ultra chips offer enhanced gaming capabilities and improved graphics performance, enabling programs like Adobe Premier to run up to 40% faster. These processors were launched in laptops that became available for purchase on Thursday.

Intel also announced its fifth generation Xeon processors, which are specifically designed to power servers used by major organizations, including cloud companies. While the pricing details have not been disclosed, previous Xeon processors have carried price tags in the thousands of dollars range. Xeon processors are often paired with Nvidia GPUs in systems used for training and deploying generative AI models. Some systems even feature eight GPUs paired with one or two Xeon CPUs. Intel claims that its latest Xeon processor is particularly effective for inferencing, the less demanding process of deploying an AI model compared to the training process. By focusing on inferencing capabilities, Intel aims to provide large organizations with a powerful and efficient solution for their AI needs.

As the demand for AI models continues to grow rapidly, competition among chip manufacturers is intensifying. Intel’s announcement of Gaudi3, along with the Core Ultra processors and fifth generation Xeon processors, demonstrates the company’s commitment to becoming a formidable player in the AI market. By developing chips optimized for AI applications, Intel aims to challenge Nvidia’s dominant position and attract AI companies away from their reliance on Nvidia’s GPUs. Similarly, AMD and Qualcomm are also realigning their product portfolios to capitalize on the surging demand for AI models. As the competition heats up, it will be interesting to see how these chip manufacturers continue to innovate and address the evolving needs of the AI industry.

Intel’s unveiling of Gaudi3, the Core Ultra processors, and the fifth generation Xeon processors showcases the company’s determination to compete with Nvidia and AMD in the AI market. By introducing chips specifically designed for AI applications, Intel aims to lure customers away from Nvidia’s dominant position in the cloud-based AI model ecosystem. The Core Ultra processors offer enhanced AI capabilities for Windows laptops and PCs, while the fifth generation Xeon processors empower large organizations with efficient solutions for deploying AI models. As Intel continues to refine and expand its AI chip lineup, the race to dominate the AI market intensifies, promising exciting advancements and increased competition in the coming years.


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