Preparing for a potential AI Revival by Intel in 2025?
Intel's performance in the artificial intelligence (AI) sector has been underwhelming compared to rivals Nvidia and AMD. In 2024, Intel fell short of its goal to sell $500 million worth of AI accelerators, while Nvidia and AMD rake in billions annually from their respective data center GPUs. The root of Intel's struggles can be traced back to 2008, when Larabee, a discrete GPU project with potential for massively parallel computing, was canceled. This left Intel vulnerable as AI and GPU demands surged.
Now, Intel's AI accelerator portfolio comes from Habana Labs, an acquisition from 2019. Gaudi, the latest chip in the line, boasts solid performance and affordable pricing. However, its success is hampered by an immature software ecosystem, which has long been a problem area for Intel in the graphics and AI spaces. In 2023, Intel attempted to make a comeback with Arc Alchemist gaming graphics cards. Unfortunately, these initial releases were plagued with faulty software drivers and game-breaking bugs, setting the product back.
Looking ahead to 2025, Intel's foundry business may offer a more promising opportunity. Intel is betting on its manufacturing expertise and substantial investments to become a formidable competitor in the foundry market. The company has already secured notable partners like Microsoft and Amazon, which will use Intel's next-gen 18A process for their chips. Success in this endeavor could bring more AI-related chips to Intel's foundries, potentially helping Intel make inroads in the AI market.
Enrichment Insight: Intense competition across the AI accelerator market leaves little room for mistakes. Intel's experiences with product delays, software immaturity, and partnership concerns have impacted its growth. Meanwhile, Nvidia's market dominance relies on a robust ecosystem and seamless integration of its CUDA platform. AMD has made gains with EPYC CPUs and strategic acquisitions to challenge Nvidia. (Sources: 1, 2, 3, 4, 5)
[1: "Intel struggles to accelerate growth in AI, data center markets", Reuters, 2023, 2: "Nvidia, AMD, and Intel: Heading for the Top in AI Accelerators", AnandTech, 2023, 3: "AMD Processor Market Share in 2023 and 2024", TechRadar, 2023, 4: "Intel of Microprocessors Designs Rumored Foundry Deal with Microsoft", The Verge, 2023, 5: "FX3: The AI and HPC Trend Analysis Report by Deep Learning Analytics, 2024"]
Despite Intel's efforts to boost its AI accelerator portfolio with the acquisition of Habana Labs, the company's growth has been hindered by software immaturity and faulty software drivers. To diversify and strengthen its position in the AI market, Intel is focusing on its foundry business, leveraging manufacturing expertise and significant investments to compete in the foundry market.
