Intel to Launch AI Chip Using Cheaper Tech to Challenge Nvidia

Intel plans to ship an AI chip by the end of this year that uses cheaper memory and cooling technology than rival offerings from Nvidia and AMD, as the US chipmaker seeks to capitalize on a sharp turnaround in its fortunes.

Kevork Kechichian, who leads Intel’s data center group, told the FT that the company is “starting with the basics” as it tries to challenge its rivals in the booming market for semiconductors that power AI.

Its new “Crescent Island” graphics processing unit is designed to speed up “inference” tasks, the stage when a user makes their request, rather than the training of models, an area where Nvidia’s processors are dominant.

An earlier attempt at building a GPU for training AI models called “Gaudi” saw poor sales, and its planned successor was cancelled last year.

“We decided to start rebuilding our muscles in AI… [but] we are not particularly aiming for [the training market] based on past experience,” said Kechichian, who joined Intel last year from chip designer Arm.

He added the new chip would start shipping in limited quantities to customers by the end of this year, following an 18-month development process.

Intel is also looking to take advantage of two constraints encountered by Nvidia and AMD: the need to incorporate expensive high-bandwidth memory and liquid-cooling infrastructure.

Crescent Island is an air-cooled chip that uses LPDDR5 memory, a significantly cheaper type of memory than the HBM used in chips such as Nvidia’s Blackwell.

The effort is Intel’s first push into the lucrative AI infrastructure market under chief executive Lip-Bu Tan, who took over last year after Pat Gelsinger was ousted amid concerns that his turnaround strategy was failing.

Intel’s new GPU was first unveiled in October as part of Tan’s broader effort to revive a product line-up that had allowed Nvidia to dominate the market for chips used to train models such as OpenAI’s ChatGPT.

Investors have welcomed the leadership change, after which Tan moved to cut costs and rein in spending on some manufacturing projects. Intel’s shares are up more than 200 percent since the start of this year, part of a broader rally in semiconductor stocks driven by enthusiasm for AI.

Kechichian said Intel was assessing whether a version of the chip could potentially be sold in China in compliance with US export controls. Nvidia and AMD’s AI chip sales to the Asian nation have been blocked by trade tensions between Washington and Beijing.

“There are tiers of [the chip] that might be OK there… and we’ll confirm that over time: clearly there is demand for that particular price point in that particular market,” Kechichian said.

In August the US government announced it would take a 10 percent stake in the company over time, as Donald Trump’s administration sought to deter the chipmaker from selling its foundry manufacturing business.

Intel subsequently launched its own advanced PC and server chips built in its own factories this year, after a long period of having them made by Taiwan Semiconductor Manufacturing Company.

Kechichian said Intel hoped to build its new chip in-house, another move that would ultimately make it cheaper than those offered by rivals who rely on TSMC.

“For all data center products we are moving aggressively into our own foundry,” he said. “That’s the intent in general.”