Nvidia Corporation (NASDAQ: NVDA) has undoubtedly taken an early lead in the AI chip race, but its rivals are doing their best to challenge its dominance. After several failed attempts to quietly enter the GPU arena, Intel Corporation (NASDAQ: INTC), the world’s largest producer of PC and server processors, may be slow to get started, but it appears to be playing for the long haul. Then there’s Advanced Micro Devices (NASDAQ: AMD), which is already promising to challenge Nvidia with its new chips.
Intel is playing the long game.
According to PassMark Software, Intel still controls 64% of the x86 processor market, but it has undoubtedly ceded significant market share to AMD over the years. AMD has forged ahead with cheaper, more advanced processors, while Intel has struggled to make smaller, denser, and more power-efficient processors of its own, struggling with delays and shortages.
Shares fell after the latest quarterly report, as sales fell short of estimates and Intel provided weak guidance for the current quarter. However, the release of Gaudi 3 is expected to generate more than $500 million in sales in the second half of the year.
Intel is also standing out from AMD and Nvidia with competitive pricing. The company is also capitalizing on its leadership role in the foundry market by opening chip manufacturing plants across the country, a costly undertaking as Intel doesn’t expect to break even on that front until 2027.
But when it comes to AI, Intel is betting on the long term. This year, Intel launched new AI accelerators. The company began expanding its manufacturing capacity in an effort to become the leading AI chipmaker. Intel has made significant changes to its business model, and these efforts and investments promise to yield significant benefits over the next decade. The company will undoubtedly grab a bigger piece of the AI pie with the launch of the Gaudi 2 and Gaudi 3 accelerators, which are capable of running AI workloads for data centers.
AMD has restructured its business to prioritize AI.
By launching its own AI GPUs and signing deals with big customers like Microsoft Corporation (NASDAQ: MSFT) and Meta Platforms (NASDAQ: META), AMD, the second-largest GPU market share company, is positioning itself well for the AI race. Additionally, AMD is able to fill supply gaps that Nvidia may not be able to fill.
But even AMD didn’t deliver impressive results. For the first quarter of 2024, revenue rose just 2% year over year to just over $5 billion, and while it saw revenue gains of over 80% in its data center and client segments, the client and gaming segments declined 40%.
But in June, AMD unveiled a new series of chips. Scheduled to be available in 2025, the MI350 will be based on a new chip architecture, promising 35 times better performance in inference—the process of calculating generative AI answers—than the currently available MI300 series. Additionally, AMD unveiled the MI400 series, scheduled for 2026 and based on an architecture called “Next.”
But Nvidia isn’t sitting idly by: in June, it also announced its next-generation AI chip platform called Rubin, which is set to launch in 2026 and will reportedly include GPUs, CPUs, and networking chips. However, while the companies mentioned above are all at earlier stages of their AI journeys than Nvidia, this could also mean they have more room to grow.
DISCLAIMER: This content is provided for informational purposes only. It does not constitute investment advice.
This article was written by an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.
“THE SECRET WEAPON OF ACTIVE INVESTORS” Boost your stock game with the #1 trading tool for “news and everything else”: Benzinga Pro – Click here to start your 14-day trial now!
Get the latest stock analysis from Benzinga?
This article Intel and AMD Want to Play a Bigger Role in the AI Era, But at a Gradual Pace originally appeared on Benzinga.com
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
