AI Arms Race: Intel Unveils New AI Chips in Bid to Reclaim Market Share from Nvidia and AMD

"Simply put, performance up, power down," Intel Chief Executive Pat Gelsinger

Introduction

In a strategic move to regain its competitive edge, Intel has introduced new artificial intelligence (AI) chips aimed at the booming AI market.

Xeon 6 processors: These are designed for data centers and compete directly with offerings from Nvidia and AMD.

Lunar Lake processors: Focused on laptops, these chips aim to make AI tasks faster and more efficient on portable devices.

Gaudi accelerators: Intel designed these specifically for AI workloads, targeting the high-end market currently dominated by Nvidia’s H100 GPUs, but at a lower cost.

This announcement, made during the Computex tech conference in Taiwan, comes at a critical time as the company seeks to reclaim market share from industry giants Nvidia and AMD.

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Background on Intel AI Chips

Intel, a pioneer in the semiconductor industry, has faced significant challenges in recent years. Despite its historical dominance, the company has struggled to keep pace with rivals Nvidia and AMD in the AI sector.

The explosive growth of AI technology has seen tech behemoths like Meta, Microsoft, and Google opt for Nvidia’s cutting-edge chips, leaving Intel playing catch-up.

Intel’s market share has been further impacted by its foundry business struggles and a series of financial setbacks, including a significant operating loss.

Intel’s Strategic AI chips Launch at Computex

At the Computex conference, Intel unveiled its new Xeon 6 processors, specifically designed for high-intensity data center workloads.

CEO Pat Gelsinger emphasized the processors’ enhanced performance and power efficiency compared to previous models, marking a significant step forward for Intel.

The Xeon 6 processors are expected to deliver substantial gains in processing power and energy efficiency, crucial for data centers managing increasingly complex AI tasks.

Regaining Lost Ground:

  • Market Share Lag: Intel has been a dominant force in chip manufacturing for decades, but in the AI revolution, Nvidia and AMD have surged ahead with specialized AI processors.
  • Data Center Challenge: Intel’s Xeon line has traditionally powered data centers, but AMD’s EPYC processors have been steadily capturing market share. Their new Xeon 6 aims to reverse this trend.

New Chip Offerings:

  • Xeon 6 for Data Centers: While details are still emerging, these next-generation Xeon processors promise improved performance and efficiency for data center workloads, including AI tasks.
  • Gaudi AI Accelerators: These are co-processors designed to specifically handle AI computations alongside central processing units (CPUs). Intel claims their Gaudi chips will outperform competitor offerings at a lower price point.

AI on the Go:

  • Lunar Lake for AI PCs: These upcoming laptop processors are designed with a focus on artificial intelligence applications. The goal is to enable faster AI processing on portable devices, potentially making laptops more capable of running AI-powered software.

Intel Competing in the AI Chips Boom

The announcement of the Xeon 6 processors comes on the heels of Nvidia and AMD launching their latest AI chips.

Nvidia introduced its new “Rubin” chips, set to replace the recently announced “Blackwell” model, while AMD outlined its roadmap for new Instinct accelerators through 2026.

These developments underscore the fierce competition for dominance in the AI market. Both companies have made significant strides, with Nvidia’s GPUs becoming the go-to choice for AI applications and AMD making inroads with its advanced processing technologies.

Performance and Efficiency Gains

Intel’s new Xeon 6 processors promise significant improvements in performance and power efficiency, critical for handling demanding data center tasks.

This launch follows Intel’s release of the 5th Gen Xeon processors and the Gaudi 3 processor, both designed for AI model training and deployment.

We expect the Xeon 6 processors to offer better computational capabilities and reduced energy consumption, addressing the growing demand for efficient AI processing in data centers.

Cost-Effective AI Solutions

Intel also revealed competitive pricing for its Gaudi 2 and Gaudi 3 AI accelerators. Gelsinger highlighted the market’s demand for high-performance, cost-effective AI training and inferencing solutions.

The Gaudi chips provide customers with more choices, open software and hardware solutions, and significantly lower total cost of ownership (TCO).

By offering these cost-effective solutions, Intel aims to attract customers looking for alternatives to the high-priced chips from competitors.

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Lunar Lake Processors for AI PCs

Looking ahead, Intel shared details about its upcoming Lunar Lake processors, expected to ship in the third quarter of 2024.

These processors aim to expand the AI PC category, directly challenging Nvidia and AMD’s AI-focused chips.

The Lunar Lake processors enhance user experiences with advanced AI applications and features by bringing AI capabilities to personal computers.

This move aligns with Intel’s strategy to integrate AI across its product portfolio, making AI technology accessible to a broader range of users.

Catching Up with Rivals

Intel’s new launches are part of a broader strategy to regain market share from Nvidia and AMD.

Both competitors have maintained a consistent release schedule for new data center chips, with Nvidia and AMD setting ambitious timelines for their next-generation products.

Nvidia’s consistent innovation and AMD’s strategic advancements have placed them at the forefront of the AI chip market, making Intel’s challenge more formidable.

Intel’s Manufacturing Challenges

In contrast to Nvidia and AMD, which primarily focus on chip design, Intel also manufactures its chips.

This dual role has presented challenges, with Intel’s foundry business reporting a significant operating loss of $7 billion in 2023.

Additionally, Intel has faced stiff competition from overseas manufacturers like Taiwan Semiconductor Manufacturing Co. (TSMC).

The foundry business has struggled to keep up with competitors’ advanced manufacturing techniques. This has affected Intel’s ability to deliver cutting-edge chips.

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Government Support and Future Prospects

The U.S. government’s CHIPS and Science Act provides nearly $20 billion in funding. This could help Intel advance its semiconductor manufacturing and research capabilities.

This support is crucial as Intel aims to overcome manufacturing challenges and enhance its competitive position in the global market.

The funding is expected to bolster Intel’s R&D efforts. This will enable the company to innovate and compete more effectively against its rivals.

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Kumar Priyadarshi
Kumar Priyadarshi

Kumar Joined IISER Pune after qualifying IIT-JEE in 2012. In his 5th year, he travelled to Singapore for his master’s thesis which yielded a Research Paper in ACS Nano. Kumar Joined Global Foundries as a process Engineer in Singapore working at 40 nm Process node. Working as a scientist at IIT Bombay as Senior Scientist, Kumar Led the team which built India’s 1st Memory Chip with Semiconductor Lab (SCL).

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