Intel Launches Latest AI Chip 'Gaudi3'... Challenges Nvidia

AI Chip Market, Nvidia Holds 80% Share
Intel Launches Latest AI Chip to Compete with Nvidia H100
Intel Claims "Twice the Power Efficiency of H100"

Facing ongoing management difficulties and acquisition offers from competitors, U.S. semiconductor company Intel has launched its latest artificial intelligence (AI) chip, boldly challenging AI chip leader Nvidia. The global AI chip market is dominated by Nvidia, which holds over 80% market share, while Intel, along with AMD, is positioning itself as a latecomer aiming to carve out its presence.

On the 24th (local time), Intel announced the release of its self-developed latest AI chip, 'Gaudi3.' This comes five months after unveiling Gaudi3 in April. Gaudi3 is an AI chip competing with Nvidia's H100, which is currently known to have the highest global demand. At the time of the April unveiling, Intel claimed that Gaudi3 offers more than twice the power efficiency of the H100 and can run AI models 1.5 times faster.

Intel explained that IBM is using Gaudi3 in the cloud, aiming to reduce overall service costs for AI technology access. Justin Hotard, Intel’s Senior Vice President and General Manager of the Data Center and AI Group (DCAI), stated in a press release, "The demand for AI is making data centers increasingly important," adding, "With advancements in AI-related technologies, there is a growing need for technological diversity in data centers."

Alongside Gaudi3, Intel also announced the release of the 'Xeon 6' server central processing unit (CPU), which was unveiled in June. This chip is designed to be installed in data centers to maximize AI performance. Intel described Xeon 6 as a more powerful version, delivering twice the performance of its predecessor. While Intel still holds over 70% of the server CPU market share, latecomer AMD is rapidly closing the gap.

The launches of Gaudi3 and Xeon 6 come at a time when Intel, which has reigned as a semiconductor powerhouse since the 1970s, is experiencing management difficulties. Intel dominated the CPU market for nearly 50 years since the late 1970s, but amid accelerating competition and declining PC demand, its quarterly revenue has continued to shrink year-over-year, and it has been criticized for not responding swiftly to the AI boom.

In response, Intel has proposed restructuring plans including workforce reductions and spinning off its foundry (semiconductor contract manufacturing) business, and it is reported to have received acquisition offers from competitor Qualcomm. Intel’s second-quarter earnings fell short of market expectations, and third-quarter results are also forecasted to miss estimates, leading to a 26% plunge in its stock price in a single day last month. Meanwhile, following the new chip releases, Intel’s stock closed at $22.81, up 1.11% from the previous session.