latest-news-headlines Market Intelligence /marketintelligence/en/news-insights/latest-news-headlines/analysis-intel-s-new-cohesive-ai-chip-strategy-to-shore-up-competitive-position-49576082 content esgSubNav
In This List

Analysis: Intel's new cohesive AI chip strategy to shore up competitive position

Blog

The Party is Over: Tupperware’s Failure

Podcast

Private Markets 360 - Episode 17: European Credit Opportunities

Blog

Engineering and Construction Cost Indicator declined in September as cost increases for materials and equipment moderate

Podcast

Next in Tech | Ep. 186: B2B Payments Technology and Markets


Analysis: Intel's new cohesive AI chip strategy to shore up competitive position

After years of investing in artificial intelligence, Intel Corp. is aligning its various AI efforts with chip development in a more cohesive strategy that analysts say will shore up weaknesses in the company's main product lines and make chips attractive to consumers and data-center customers.

To that end, the company is releasing an artificial intelligence chip called Nervana Neural Network Processor for Inference later this year. The Nervana chip will go into servers and have a function similar to that of Google's Tensor Processing Unit chip, which runs low-level calculations to approximate answers in applications such as image or speech recognition. Artificial intelligence instructions also were integrated into Xeon Scalable processors, server chips that will ship in the first half of 2019, said Intel's interim CEO Robert Swan during a Jan. 24 earnings call. Intel expects demand for the chips to pick up in the second half of 2019.

SNL Image

This is the first time Intel will add artificial intelligence-specific instructions to chips, which should help speed up cloud tasks in servers. Intel has many artificial intelligence products such as discrete chips and incorporates the technology in products such as Mobileye hardware and software for autonomous cars. While the company has a wide breadth of AI capabilities across its divisions, it has been hindered by the lack of a cohesive strategy for AI, analysts said.

In the PC-centric business, laptops released with new Intel chips in the fourth quarter of this year will have features specific to computer vision and natural language processing, the company announced in early January at technology expo CES 2019. The laptop chip redesign should bring more smartphone-like interactive capabilities to devices with larger screens. Also, the company's first discrete graphics processors coming in 2020 will have deep learning features.

Intel made progress in artificial intelligence during the fourth quarter of 2018 with partners creating artificial intelligence chips based on Intel's underlying technology. Adoption of technologies like Intel's OpenVINO — an open source software development package used for computer vision — also grew, Swan said. Intel has boosted its computer vision offerings, which Swan hopes will benefit the internet of things business.

"While digital video was once a vertical within the IoT business, AI-based machine vision is becoming a critical horizontal capability that cuts across all IoTG verticals," Swan said.

Intel is taking steps to cohesively bring together a vast number of artificial intelligence assets, and that should add more value to the company's products in 2019 and beyond, analysts said. Intel has acquired several artificial intelligence hardware and software companies, notably Altera for $16.7 billion in 2015.

"The impact to artificial intelligence will be huge at Intel. It has made many AI-related acquisitions like Movidius, Altera, and Nervana and built AI into its own chips using special instructions," said Patrick Moorhead, principal analyst at Moor Insights & Strategy, in an interview.

Demand for chips with artificial intelligence features is growing in data centers, which drives services such as image recognition and natural language processing. Alphabet Inc.'s Google, Facebook Inc. and Amazon, all of which rely on Intel server chips, are rapidly expanding the number of servers in data centers to meet the growing computing requirements.

Intel is aiming to sell to hardware manufacturers such as Dell Technologies Inc., Hewlett Packard Enterprise Co. and Lenovo Group Ltd., cloud service providers such as Amazon's AWS and Microsoft Corp.'s Azure, and intelligence device manufacturers such as Google and Amazon, Moorhead said.

Despite its investments in AI, Intel is coming to market behind many competitors as it was slow to come up with a plan to unify its artificial intelligence assets, said Jim McGregor, principal analyst at Tirias Research. By his count, up to 300 companies already make chips for artificial intelligence, including Google, NVIDIA Corp. and ARM Holdings PLC.

it might be that Intel is trying to nail down specific applications for AI, he said. The sheer number of assets acquired by Intel also may have complicated the creation of a comprehensive product roadmap.

"Intel is the only company that has made investments in hardware and software, but it's still piecemeal," McGregor said.

SNL Image