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Intel benefits from Nvidia AI chip shortage

by on11 September 2023

Customers will use any old chip

The shortage of Nvidia’s GPUs has customers searching for scrap heap to kickstart makeshift AI projects, and Intel is benefitting from it.

During a meeting with financial analysts at the Citi Global Technology Conference this week, Intel’s chief financial officer David Zinsner said customers seeking quick implementation of AI projects are looking at alternatives to GPUs.

“The challenges in getting GPUs — I think we see more customers taking a look at Gaudi as an alternative. And in addition, the price points are better and more attractive,” Zinsner said.

According to HPCwire  Zinsner said Gaudi and Gaudi2 chips were shipping, with Gaudi3 coming out in a “reasonable period.”

During an earnings call last month, CEO Pat Gelsinger said the company has a $1 billion pipeline for AI chips. Zinsner said the pipeline is unrelated to AI chip orders secured by Intel but to “any customer that we could potentially see some business from who’s expressed some interest — we’re counting that then has to be converted to real dollars.”

Intel is considered many years behind GPU technology compared to Nvidia, which reported revenue of $13.51 billion in its most recent quarter and was up 101% from the year-ago quarter. Nvidia’s AI breakthroughs have made it a market leader, leaving Intel and AMD in the dust. Nvidia’s market cap is $1.14 trillion, while Intel’s is $160 billion.

“There’s a need for GPUs to do that [AI] work. I think we are a beneficiary of that because of our CPU,” Zinsner said.

Many Nvidia H100 GPU installations are alongside Intel’s Sapphire Rapids chip, which supports DDR5 memory.  However, a larger amount of dollars are going to GPUs for large language models, which will continue to hurt Intel’s revenue in the coming quarters.

“That takes a little bit of a wind out of the sales of our data centre business and is part of why we think Q3 three and Q4 four will be more muted than they have been in the past,” Zinsner said. Looking ahead, Intel is building a competitive AI product lineup to provide some competition to Nvidia.

“That will be our story in 2024 — driving Gaudi together with CPUs. Ultimately, we’ll have our Falcon Shore GPU product out in 2025. A lot of that is building the software ecosystem,” Zinsner said.

 Intel is trying to reduce the confusion around its fastest AI chips by merging the discrete Gaudi AI chips into the Falcon Shores GPU.

“What will happen is Gaudi will converge with Falcon Shores,” Zinsner said, adding, “There will be one product offering.” That will pack Intel’s fastest AI chips into a single product offering, reducing the confusion on whether customers should build their AI computing around Gaudi or Falcon Shores.

The Gaudi lineup is also targeted at customers looking to build AI rigs in-house or in controlled environments and not in the cloud, Zinsner said.

Last modified on 11 September 2023
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