Intel Pushes Nvidia Chip Competition Amidst AI Frenzy

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Intel positions Gaudi AI GPU accelerator as direct Nvidia competition as funding for chip start-ups evaporates

Intel has said its AI accelerator chip business is benefiting from a shortage of chips from market leader Nvidia, amidst a boom in the artificial intelligence sector that has spurred frenzied competition.

David Zinsner, Intel’s chief financial officer, told financial analysts at the Citi Global Technology Conference in New York City that due to the “challenges in getting GPUs” there were “customers taking a look at Gaudi as an alternative”.

“And in addition, the price points are better and more attractive,” he said.

Gaudi is a line of GPU accelerator chips Intel acquired with its $2 billion (£1.6bn) acquisition of Habana in 2019.

Intel Image credit Slejven Djurakovic Unsplash
Image credit: Slejven Djurakovic/Unsplash

GPU competition

Intel launched Gaudi2 in May, with a modified version for the Chinese market following in July.

Zinsner said Gaudi3 would be appearing in a “reasonable period of time”.

He said Intel would be promoting “Gaudi together with CPUs” next year, followed by the introduction of the Falcon Shore GPU in 2025, while building the software ecosystem.

He said Intel would be merging Gaudi and Falcon Shore in order to reduce confusion around its different GPU lines.

Start-up funding

Intel faces an uphill battle in competing with Nvidia, which is estimated to control 80 to 95 percent of the AI computing market, according to analysts.

Nvidia reported revenue of $13.51bn in its most recent quarter, up 101 percent from a year ago, and has a market capitalisation of $1.14tn, compared to $160bn for Intel.

AMD similarly makes GPUs that compete directly with Nvidia for AI workloads.

Nvidia’s dominance of the market has had a knock-on effect for funding for start-ups seeking to enter the field, according to a research firm.

Software surge

US chip start-ups raised $881.4m this year through the end of August, according to PitchBook, compared to $1.79bn for the first three quarters of last year, with the number of deals dropping from 23 to four.

The decline in investment was directly related to Nvidia’s strong market share, which has spooked investors, according to analyst firm Eclipse Ventures.

Start-ups in AI software and related technologies have meanwhile seen a boom in funding, raising $24bn this year through August, according to PitchBook.