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Intel scores big AI chip customer

Translate from : Intel scorer stor AI-chip kunde

Intel has been overtaken by market leader Nvidia and rival AMD in the AI accelerator market. While Nvidia generates more than $26 billion in data center revenue each quarter and AMD is expected to sell $4.5 billion worth of AI accelerators this year, Intel lags far behind.

Launched this year, Intel's new Gaudi 3 AI accelerator is powerful and cost-effective. But it is a challenge for the company to attract customers. Intel expects to generate only $500 million in revenue from the sale of Gaudi 3 in 2024, a small sum compared to Nvidia and AMD.

But 2025 looks set to be a better year for Intel's AI chip business. Last week, Intel and IBM announced a partnership that will place Intel's Gaudi 3 chips in IBM's cloud data centers. IBM will be the first cloud service provider to adopt Gaudi 3 when the collaboration bears fruit in 2025.

In addition to making Gaudi 3 chips available as part of their cloud platform, IBM is also integrating Gaudi 3 with their Watsonx AI platform. IBM has carved out a niche in the market by targeting enterprise customers and pairing their Watsonx platform with their extensive consulting business.

So far, the company has booked more than $2 billion in business related to generative AI. The plan is to use Gaudi 3 to lower the total cost of ownership for IBM's enterprise customers.

AI chips from market leader Nvidia have become the gold standard, but are also expensive. Intel has highlighted the affordable nature of its Gaudi 3 chips, announcing prices earlier this year. The company claims that an AI package with eight Gaudi 3 chips costs only two-thirds the price of comparable competitive platforms.

Notably, Gaudi 3 will be available for hybrid and on-premise environments as part of IBM's cloud offering. IBM's cloud strategy revolves around hybrid cloud computing, which combines public cloud computing with on-premises infrastructure.

Hybrid cloud has become increasingly popular among companies with complex IT infrastructures. Intel is in a difficult period, there is no doubt about it. The company's turnaround, which focuses on their semiconductor manufacturing, does not go as planned.

Intel announced sweeping job cuts alongside its disappointing second-quarter results, and the company is expected to sell assets and exit non-core businesses in an effort to shore up its finances. The collaboration with IBM is much-needed good news and is a sign that Intel's Gaudi 3 AI chips are an attractive solution for cloud service providers.

The scale of the Gaudi 3 rollout was not discussed, but getting their AI chips into cloud data centers is a big win for Intel. Although Intel's AI chip business won't move much this year, momentum is finally starting to build for the company's Gaudi 3 accelerators.