Intel looks to level up in AI race
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Good morning from the Financial Times. Today is Monday, June 1st, and this is your FT News Briefing. Intel is going back to basics with a new AI chip, and the inflation shock from the Iran war might not be as severe as the one we saw in 2022. Plus, the EU is watching warily as China flexes its manufacturing might in Morocco.
There is nervousness in Brussels and certainly a desire to send a signal that they don't want Morocco and indeed other North African countries, Egypt, Algeria, to become proxy surrogates for Chinese dumping.
I'm Victoria Craig, and here's the news you need to start your day.
Intel is hoping to secure its place in the AI infrastructure race. By the end of this year, it plans to start shipping a new chip that will power artificial intelligence platforms, one that will be cheaper to produce than ones made by its rivals, NVIDIA and AMD. Michael Acton has the details on this one. He covers the semiconductor industry for the FT and joins me now. Hi, Michael.
What new AI chip is Intel planning to release?
Hi.
All right. So Intel told you that it's, quote, starting with the basics in a bid to challenge its rivals here. Just walk us through what the plans are for the company.
So this is really about Intel's failure about four years ago to launch a competitive product with the graphics processing units that NVIDIA has risen to power on. So a graphics processing unit is a chip needed to train and run AI models. And it really sort of eclipsed the traditional central processing units or CPUs that Intel has dominated in in the past. And this is Intel positioning itself to launch its own GPU unit. And there are certain aspects of this chip that make it interesting. One is the memory. So Intel is using a different type of memory from the extremely expensive high bandwidth memory that goes into chips from the rivals like NVIDIA and AMD. It's also bypassing the need for liquid cooling infrastructure.
So if you're building a data center, in theory, you wouldn't need to build this huge network of water pipes and things to make it work. And then there's this sort of looming idea that Intel might actually build this chip finally in-house in its own factories in the U.S., which also brings down the costs. It also hasn't ruled out the idea that some version of this chip could sell in China. And that's a really interesting dynamic given the tensions between Washington and Beijing, whether Intel could succeed where NVIDIA and AMD have really struggled in offering some sort of price-effective chip in China.
Lots still to be decided then. Where does this position Intel in the global AI race?
So what we know is, and Intel's candid about this, that they're not trying to build a GPU that goes toe-to-toe with NVIDIA and AMD on training the frontier models that we're familiar with, so the chat GPTs of the world, the Claudes of the world. They're really looking to target the infrastructure for running the models. So it's early days, but Intel's looking to sort of build a platform of its own. When we're talking about platform, a lot of people just think about chips. But really, it's not just about the chip. It's about building a server that chip goes into. It's about all of the wires and connecting technology that goes into those data centers that allows the chips to communicate with each other.
And then a layer of software on top of it that lets you actually run workloads on it. So it's an incredibly complex thing. It's not just about the chip. That's something that NVIDIA has done to great effect. And this is Intel positioning itself to kind of do the same It doesn't need to own the entire market, but it does need to grab a slice of that hundreds of billions of dollars that tech companies are pouring into this infrastructure.
Now, all of this is part of a strategy from the new Intel boss, Libhutan, which investors love. The stock is up more than 200 percent this year. But how high are the stakes for him at this point?
So the narrative has definitely shifted around Intel. Things were looking dire even just a year ago around numerous things.
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