Intel (NASDAQ: INTC) has aimed to penetrate the artificial intelligence (AI) accelerator market with its Gaudi line of chips, acquired through a $2 billion purchase of Habana. Launched initially in 2024, Intel set a $500 million sales target, which it failed to meet due to an immature software ecosystem and a convoluted architecture. IBM was a notable customer for Gaudi 3, but overall, the chip’s performance did not compete favorably against Nvidia and AMD products.
Intel has abandoned its upcoming Falcon Shores GPU, shifting its focus to a new product, Jaguar Shores, expected for release in 2026. As AMD moves forward with its Helios rack-scale AI solution, which will combine up to 72 GPUs and EPYC CPUs, Intel may struggle to catch up in a rapidly evolving market. Meanwhile, AMD has secured significant partnerships, including with Oracle and OpenAI.
Despite setbacks in the AI chip space, Intel’s foundry business remains a potential beneficiary in the growing AI market. The company is preparing to start volume production on its advanced 18A process, attracting interest from potential customers for manufacturing AI chips, even as its own chip development lags behind competitors.
