Intel unveiled its latest artificial intelligence chip, Gaudi 3, which is touted to be over twice as power-efficient and one-and-a-half times faster than Nvidia’s H100 GPU. The chip comes in various configurations and has been tested on models like Llama and Falcon, showcasing its ability to train and deploy big AI models efficiently. Intel claims that its chips use less power than those of Nvidia, which currently dominates the AI chip market. The new Gaudi 3 chips will be available in the third quarter, with companies like Dell, HP, and Supermicro set to build systems using these chips.
Nvidia currently holds an estimated 80% share of the AI chip market with its GPUs, making it the preferred choice for AI builders. However, there is still room for competition, as the data center AI market is expected to grow with the increasing demand for AI software infrastructure. Companies are seeking additional suppliers to help reduce costs associated with running generative AI and purchasing Nvidia GPUs. AMD is also aiming to expand its offerings with the introduction of the MI300X data center GPU, which has already garnered customers like Meta and Microsoft.
Last year, AMD unveiled the MI300X data center GPU, while Nvidia introduced the B100 and B200 GPUs as successors to the H100. These chips promise performance gains and are set to begin shipping later this year. Nvidia’s success can be attributed to its CUDA software suite, which allows AI scientists to access the hardware features in a GPU efficiently. In contrast, Intel is teaming up with other chip and software giants like Google, Qualcomm, and Arm to develop open software that is not proprietary. This approach could potentially enable software companies to switch chip providers more easily.
Gaudi 3 is built on a five nanometer process, indicating that Intel is utilizing an outside foundry for chip manufacturing. In addition to designing Gaudi 3, Intel plans to manufacture AI chips, potentially for external companies, at a new Ohio factory expected to open in 2027 or 2028. The company’s collaborative efforts with industry leaders to create open software solutions aim to provide customers with more flexibility in choosing chip providers and building customized solutions. Despite Nvidia’s dominant position in the AI chip market, the emergence of newer, more power-efficient options like Gaudi 3 from Intel and the MI300X from AMD suggest that competition in the space is heating up.
The AI boom has significantly boosted Nvidia’s stock over the past year, while Intel’s stock has seen more modest gains. As cloud providers and businesses continue to invest in AI software infrastructure, there is potential for other competitors to gain a foothold in the AI chip market. With the launch of new and improved chips like Gaudi 3 and the partnerships being forged by Intel with key industry players, the landscape of the AI chip market is evolving, offering customers more options and driving innovation in the field.
