Intel CEO Pat Gelsinger banking on AI; Announces new PC chips and data centers to drive growth

Intel's CEO, Pat Gelsinger, is counting on AI features to drive growth for the company, as it faces tough competition from AMD and Nvidia in the PC and data center chip markets.

Intel’s new product with the most to prove may be the Gaudi 3, the latest installment of a line that competes with Nvidia Corp.’s industry-leading H100. (REUTERS)

Intel, the top PC processor maker, has launched new chips for PCs and data centers, aiming to expand its share in the growing artificial intelligence hardware market. The updated Xeon server chips consume less power while enhancing performance and memory. Intel's Ultra Core chips for laptops and desktops enable direct AI processing on personal computers. Intel CEO Pat Gelsinger is said to be counting on AI features to drive the growth of the company.

Intel announces new PC chips, data centers

Intel's new product with the most to prove may be the Gaudi 3, the latest installment of a line that competes with Nvidia Corp.'s industry-leading H100, reported Bloomberg. These chips — known as AI accelerators — help companies develop chatbots and other rapidly proliferating services. Gaudi 3 is on schedule for release in 2024, and Intel said that it will outperform the H100.

Intel shares rallied as much as 5.6% in New York trading following the announcement, outpacing a 3.1% gain by the Philadelphia Stock Exchange Semiconductor Index. 

CEO Gelsinger is counting on AI features to help reinvigorate growth at Intel, which has suffered from past missteps and a broader PC slump. But he faces tougher competition than ever. Longtime rival Advanced Micro Devices Inc. has snatched market share in PCs and servers, and some of Intel's largest customers are now designing their own chips in-house, as per Bloomberg. 

At the same time, Nvidia has become a dominant force in data center chips with its AI accelerators. The products have sent sales soaring and propelled Nvidia's valuation above $1.1 trillion. It's now on course to overtake Intel in total revenue this year for the first time, according to analysts' projections. For decades, Intel was the biggest chipmaker in the world. 

AMD also is playing catch-up with Nvidia in AI accelerators. Its version of that product, the MI300, will debut next year. AMD unveiled the chip at an event last week and announced that the market for AI accelerators could climb to more than $400 billion in the next four years.

Intel looks to gain an edge by shifting more AI processing toward devices, rather than data centers. The new Ultra Core chips, which do just that, will be available in roughly 230 PC models from manufacturers such as Dell Technologies Inc. and Samsung Electronics Co. starting as soon as Thursday, Intel said.

Another shift could help Intel. For now, the AI industry has concentrated on developing chatbots and services through a process called training, which involves bombarding the software with data. In the future, companies may be more focused on actually running their completed software — something that can be handled with Xeon processors in data centers and with PC chips, Intel said. 

“A few people create models — lots of people use them,” Gelsinger told the audience at an event in New York. AI will be handled by PCs and other gadgets because of the high costs of data centers, he said. Sending data over the internet also limits the responsiveness of systems, he said.

But running AI software on a laptop can quickly drain the battery. To mitigate that risk, the new Core parts will run more efficiently and — in their highest-end configuration — provide more than 10 hours of life even during the most demanding tasks, Intel said.

Intel's Xeon range will get new components that make them 42% better at running AI-related workloads than the previous generation, the company said. That predecessor was rolled out in January 2023.

Overall, the component will be 36% better when measured by performance per watt of electricity, Intel said. And even more new versions of the Xeon line will be ready in the first half of next year, the company said, part of Intel's push to speed up product releases.

Gelsinger aims to turn around the company and restore it to prominence in the semiconductor industry, which he believes will grow to a trillion dollars in sales by the end of the decade. He assured the audience Thursday that his comeback plan is working.

(With inputs from Bloomberg)