In the AI chip race, Nvidia Corporation (NASDAQ: NVDA) has undoubtedly taken an early lead, but rivals are doing everything in their power to challenge the company's dominance. Intel Corporation (NASDAQ: INTC), the largest maker of PC and server CPUs, has made multiple failed attempts to sneak into the GPU space and may be moving slowly, but it appears to be in it for the long haul. And Advanced Micro Devices (NASDAQ: AMD) has already pledged to challenge Nvidia with new chips.
Inter are playing a long game.
Intel still holds 64% of the x86 CPU market, according to PassMark Software, but it's arguably ceded a lot of market share to AMD over the years, as AMD got ahead with cheaper, more advanced CPUs while Intel struggled to make its own smaller, denser, more power-efficient CPUs, plagued by delays and shortages.
The company's shares fell sharply following its latest quarterly report, after revenue fell short of expectations and Intel issued a weak outlook for the current quarter, but the release of Gaudi 3 means the company is on track to bring in more than $500 million in revenue later this year.
Intel is also trying to differentiate itself from AMD and Nvidia with competitive pricing, and is also betting big on becoming a major player in the foundry market by opening chip factories across the U.S. — a costly move as Intel doesn't expect to break even in the sector until 2027.
But when it comes to AI, Intel is playing the long game. This year, Intel announced new AI accelerators. The company has begun expanding its manufacturing capacity with the aim of becoming a leader in AI chip manufacturing. Intel has made significant changes to its business model, and these efforts and investments are expected to pay off handsomely over the next decade. With the announcement of Gaudi 2 and Gaudi 3 accelerators capable of running AI workloads in data centers, there is no doubt that Intel is looking to grab a bigger share of the AI space.
AMD has restructured its business to prioritize AI.
AMD has launched its own AI GPUs, signed deals with major clients such as Microsoft Corporation (NASDAQ: MSFT) and Meta Platforms (NASDAQ: META), and has the second largest GPU market share, giving the company a strong position in the AI race, and allowing AMD to fill any supply gaps that Nvidia cannot.
But even AMD didn't deliver an impressive earnings report, with first-quarter 2024 revenues up just 2% year over year to just over $5 billion, with data center and client revenues up more than 80%, but client and gaming revenues down 40%.
However, in June, AMD unveiled its next chip series. The MI350, due for release in 2025, will be based on a new chip architecture and is expected to deliver a 35x improvement in inference (the process of computing generative AI responses) performance compared to the currently available MI300 series. Additionally, AMD unveiled the MI400 series, due for 2026 and based on an architecture called “Next.”
But Nvidia isn't resting on its laurels either, unveiling its next-generation AI chip platform, Rubin, in June, which is due to launch in 2026 and will include GPUs, CPUs, and networking chips. However, while all of the above companies are in the early stages of their AI efforts compared to Nvidia, this could also mean that there is more room for growth.
Disclaimer: This content is for informational purposes only. It is not intended as investment advice.
This article is an unpaid outside contributor, does not reflect Benzinga reporting, and has not been edited for content or accuracy.
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This article Intel and AMD aim to play a bigger role in the AI era, but at a slow pace, originally appeared on Benzinga.com.
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