Is Intel Ready for an AI Comeback in 2025?

Intel's AI Accelerator Challenges - Intel's Gaudi 3 chip offers solid performance but struggles with an immature software ecosystem, limiting its success despite aggressive pricing [1] - The company's software immaturity has been a recurring issue, as seen with the Arc Alchemist gaming graphics cards, which initially failed due to faulty drivers and bugs [2] - Intel's AI accelerator roadmap is complicated, with the Max family of GPUs and Gaudi family of AI accelerators not being extended, and the next-generation Falcon Shores expected to launch by the end of 2025 [3][4][5] Intel's AI Market Position - Intel has fallen behind in the AI accelerator market, with Nvidia dominating and AMD being competitive, while Intel missed its 2024 goal of selling $500 million worth of AI accelerators [7] - The company's past decision to cancel the Larabee GPU project in 2008 has hindered its ability to compete in the AI revolution and meet the demand for GPU accelerators [8] - Intel's current AI accelerator lineup comes from Habana Labs, acquired in 2019, with the Gaudi family of AI chips being similar to but not traditional GPUs [13] Intel's Foundry Business and Future Opportunities - Intel is leveraging its manufacturing expertise and investments to build a foundry business, with the Intel 18A process scheduled for volume production next year [10] - The company has secured high-profile customers like Microsoft and Amazon for its Intel 18A process, which could lead to more AI-related chip production in the future [11] - While Intel's AI accelerator revenue may not be impressive in 2025 due to software issues, the foundry business could become a larger opportunity for capturing AI spending in the long term [12] Intel's Recent Successes - Intel secured a deal with IBM to integrate Gaudi 3 chips into IBM's cloud data centers and watsonx AI platform, which is expected to boost Gaudi sales this year [6] - The company has improved its software over time, leading to better performance for its second-generation graphics cards [2]