Intel has secured IBM Cloud as the inaugural cloud customer for its next-generation Gaudi 3 AI acceleration chip.
On Thursday, Intel and IBM announced that starting early next year, IBM Cloud will offer its clients access to the Gaudi 3 chip. This technology will support both hybrid and on-premise setups, with IBM planning to integrate Gaudi 3 support into its Watsonx AI and data framework.
Justin Hotard, who leads Intel’s data center and AI operations, highlighted the importance of an open, collaborative ecosystem for realizing AI’s full potential. He emphasized the partnership with IBM Cloud as a way to expand AI capabilities and address the need for cost-effective, secure, and innovative AI computing options by combining Gaudi 3 AI accelerators and Xeon CPUs.
Introduced in December 2023, Gaudi 3 represents Intel’s competitive response to AI processing units from Nvidia and AMD, concluding the Gaudi accelerator line acquired from Habana Labs for $2 billion in 2019.
Earlier in the year, Intel unveiled Gaudi 3 reference models for server use among partners like Lenovo and Dell. These models feature an updated Ethernet capability aimed at challenging Nvidia’s InfiniBand, pairing the Gaudi 3 chips with Intel’s Xeon 6 series processors.
Yet, the launch of Gaudi 3 comes at a challenging time for Intel, which finds itself at a strategic disadvantage against Nvidia’s longstanding market presence.
Intel projected in April 2023 that Gaudi 3 would generate $500 million in revenue in 2024 — significantly less than AMD’s expected $3.5 billion from its Instinct MI300-series GPUs, and Nvidia’s anticipated $40 billion from its data center division. Despite Gaudi 3’s cost-effective performance as showcased in early evaluations, attracting customers with existing ties to Nvidia remains difficult.
Intel’s Chief Technology Officer, Greg Lavender, maintained an optimistic outlook in July, stating Intel could become the second-leading player in the AI chip sector after Nvidia. However, following a $1.6 billion loss in Q2, Intel announced a plan in August to slash 15,000 jobs and decrease expenses significantly by $10 billion in 2025.
Intel’s challenges are compounded by Nvidia’s announcement to accelerate the production of its advanced AI chip, Blackwell, in the fourth quarter, following a slight delay. This new chip is projected to deliver up to four times the performance of Nvidia’s H100, the benchmark against which Gaudi 3 has been favorably compared.
Despite the heightened competition, Intel has refrained from making direct performance comparisons with Blackwell, stating such analysis will have to wait until the Blackwell chips are commercially available.
Compiled by Techarena.au.
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