Intel Plans to Beat AMD for Second Place in the Artificial Intelligence (AI) Chip Race

Core Insights - The company is focusing on open-source software to enhance its AI hardware appeal and leverage its foundry business to meet the rising demand for AI chips [1] AI Chip Market Dynamics - Nvidia currently dominates the AI accelerator market, making it challenging for competitors to gain traction due to its superior hardware and software ecosystem [1] - Competitors like Intel and AMD are vying for the second position, with AMD projected to generate approximately $4 billion in AI chip sales this year, while Intel anticipates only $500 million from its Gaudi 3 chips [2] Intel's Strategy - Intel is optimistic about becoming the runner-up in the AI chip market, emphasizing its software initiatives and the demand for Gaudi 3 chips [3] - The company aims to achieve $1 billion in software and developer cloud subscription revenue by 2027, partly through AI services [3] Open-Source Software Initiatives - Intel is investing in open-source software to compete with Nvidia, participating in the UXL Foundation to create a software ecosystem based on its oneAPI technology [4] - The company is also contributing to OpenAI's Triton initiative, which is designed to simplify efficient code writing for GPUs [4] AMD's Software Efforts - AMD is developing its own software stack, ROCm, which is open-source but currently only supports AMD GPUs [5] Foundry Business Potential - Intel's foundry business could provide significant revenue opportunities, aiming to become the second-largest foundry by 2030, with the Intel 18A process expected to launch early next year [5][6] - The company has secured a deal with Microsoft to manufacture a custom chip using the Intel 18A process, which could be an AI accelerator or data center CPU [6] Long-Term Prospects - Despite a slow start, Intel's future AI chips and foundry revenue could lead to billions in annual revenue, enhancing its long-term prospects in the AI market [6]