Intel ( INTC ) unveiled artificial intelligence chips on Tuesday as it seeks to improve its data center business and steal market share from rivals AMD ( AMD ) and Nvidia ( NVDA ). The new chips, the Xeon 6 CPU and the Gaudi 3 AI accelerator, promise improved performance and power efficiency and come at a time when Intel is trying to prove it has what it takes to be a major player in the space. of AI.
The announcement follows a Wall Street Journal report that Qualcomm ( QCOM ) is looking to acquire Intel to strengthen its chip business. Meanwhile, Bloomberg, reported that Apollo Global Management is interested in making a multi-billion dollar investment in the chip maker that will support Intel CEO Pat Gelsinger’s major transformation plan. (Disclosure: Yahoo Finance is owned by Apollo Global Management.)
Intel says the new Xeon 6 chip offers P-cores, or processing cores, and says it has twice the performance of its predecessor. The chip, according to the company, is built for AI and high levels of computing performance including edge and cloud computing.
On the other hand, the Gaudi 3 processor is built for AI-powered devices and will compete with Nvidia’s H100 and AMD’s MI300X line of chips. Intel says IBM (IBM) is using its Gaudi 3 accelerators as part of its IBM Cloud with the goal of providing a lower total cost of ownership.
“The need for AI is leading to a big change in the data center, and the industry is asking for choices in hardware, software, and development tools,” said Justin Hotard, Intel’s executive vice president and general manager of the Data Center. Artificial Intelligence Group, said in a statement.
“By introducing Xeon 6 with P-cores and Gaudi 3 AI accelerators, Intel enables an open environment that allows our customers to implement all their tasks with great performance, performance and t “security.”
Intel is also quick to point out that 73% of GPU-accelerated servers, servers designed to power AI applications, use Xeon chips as the host CPUs they need to work well. But Intel’s chips aren’t the hot tickets they once were. Companies instead are trying to get their hands on Nvidia’s line of AI chips, which is causing the company’s stock price to rise.
Nvidia’s stock price is up a staggering 142% year to date, while Intel shares are down 52%. AMD shares rose 12% over the same period.
During its latest quarterly earnings report in August, Intel reported worse-than-expected revenue and earnings per share and gave a disappointing outlook for its current quarter. The company also said it would cut 15% of its workforce and freeze its dividend payments.
Gelsinger is trying to return Intel to its former glory by pushing its teams to build advanced chips for the data center and consumer PCs while simultaneously building capacity. theirs to do.
Intel hopes to dramatically expand its chip infrastructure, the facilities that produce the chips, both in the US and abroad. But the company announced last week that it would halt construction of planned plants in Europe and that it would not start its advanced packaging plant in Malaysia until demand for the chips picked up.
Intel also made some good news last week, saying it will build custom chips for Amazon ( AMZN ), joining Microsoft ( MSFT ) as another marquee customer for the startup of third-party chip makers.
The firm also said it is separating its infrastructure division from its architecture business to provide a clear separation between the two organizations, giving potential customers peace of mind that Intel’s architecture team will not be able to find their chip designs.
But Intel’s struggles during the turnaround have made it a takeover target for the likes of Qualcomm, which could use the company to grow its chip business more in the data center and PC businesses.
Qualcomm is very dependent on its smartphone segment. But smartphone sales have declined over the years as consumers have started to hold onto their handsets longer, leading Qualcomm to look for new growth opportunities.
One such opportunity involves building laptop chips meant to compete with Intel’s line of processors. However, it will take a long time for Qualcomm to break away from Intel’s PC market share if it can do so at all.
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.
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