How does Intel Xeon Scalable processors redefine Intel’s AI Game?

Intel's game-changing move in the AI arena comes in the form of the Xeon Scalable processors, unveiled to the world with a promise to reshape the company's role in artificial intelligence.


In the rapidly evolving landscape of artificial intelligence (AI) and high-performance computing, Intel has recently made a significant stride with the release of its 5th Gen Xeon Scalable processors, famously known as Emerald Rapids. On December 14th, 2023, Intel launched these processors, aiming to redefine its standing in the CPU market, with a particular focus on AI computation.

In this blog post, we will delve into the unique features of Emerald Rapids, the potential it holds for Intel, and the competitive landscape it faces.

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Emerald Rapids Unleashed:

Intel’s Emerald Rapids processors mark a pivotal moment in high-performance computing, offering up to 64 cores and boasting a remarkable 40% performance improvement over their predecessors. The processors have shown a 42% higher performance in AI inference and a 21% increase in general compute performance compared to the previous model, Sapphire Rapids. Notably, the processors have demonstrated a 36% increase in performance per watt across various workloads, addressing the growing concerns about power consumption in data centers.

The processors are developed on the sophisticated ‘Intel 7’ process node, showcasing Intel’s commitment to refining design methodologies and improving performance while keeping manufacturing costs in check. This incremental yet impactful release is seen as a positive turn for Intel, especially following a challenging period. The emphasis on manufacturing execution, processor design improvements, and workload optimizations positions Intel on a solid growth path.

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Performance, Power, and Security: The Triple Focus

Emerald Rapids’ design focuses on three key aspects: performance, power efficiency, and security. The processors introduce a two-tile, 32-core architecture, reducing reliance on external resources and enhancing data movement and processing speed. The UltraPath Interconnect (UPI) and support for 5.6 GHz DDR5 memory contribute to the significant speed boost, while the upgraded L3 cache to 320 MB further improves overall performance.

Security is a paramount concern in the AI era, and Intel addresses this by integrating application-level security through SGX and virtual machine/environmental security enabled by trusted domain extensions (TDX). This combination ensures comprehensive security with minimal latency, catering to diverse computing environments.

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Edge Computing Advantage:

One of the distinguishing features of Intel’s processors is their superior performance in handling local AI models, particularly in edge computing scenarios. Unlike some competitors, Intel integrates AI into existing data centers, reducing the need for complex buildouts. This approach provides a smooth increase in AI performance without causing significant disruptions for companies. The processors are not limited to handling small AI models but can efficiently manage large AI models, making them versatile for various applications.

Real-world Success: The IBM Case

Intel’s 5th Gen Xeon processors have already demonstrated real-world success, with IBM utilizing the technology to improve performance on its platform. The chips are not only efficient but also cost-effective, boasting a 77% reduction in total cost of ownership over a 5-year lifecycle. This cost efficiency is a key factor in the adoption of AI using edge computing networks.

Valuation and Market Potential:

The global AI chip market is projected to double to $119.4 billion by 2027, and Intel aims to capture 20% of this market share. This could translate to an additional $23.88 billion in revenue, with significant upside potential in the market cap. At a conservative forward price to sales multiple of 3.93, this implies a 44.1% upside in share price potential. Intel’s valuation, though lower than some competitors like Nvidia, reflects a more conservative estimate.

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Risks and Challenges:

While the future looks promising, Intel faces stiff competition from rivals such as AMD, Ampere Computing, and Nvidia. Additionally, the history of delays with Sapphire Rapids processors has eroded confidence in Intel’s abilities, and the focus on per-core performance over core count may pose challenges in high-core-count markets. The shift towards custom silicon and Arm-based designs by major cloud providers adds another layer of complexity.


Intel’s 5th Gen Xeon Scalable processors, Emerald Rapids, represent a major opportunity for the company to reassert its dominance in the CPU market, particularly in AI computation. The processors’ performance, power efficiency, and security features position them as formidable contenders. While facing challenges and competition, Intel’s focus on innovation, execution, and adapting to market trends gives it a fighting chance. As we step into 2024, the stock appears to be a strong buy, with the potential to capitalize on the growing demand for powerful and energy-efficient AI solutions.

Editorial Team
Editorial Team
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