Written by: Jay Yi, MBA; Edited by: Chris Thompson, CFA, MBA, P.Eng
eResearch | Intel Corp. (NASDAQ: INTC), the world’s second largest semiconductor chip manufacturer, announced a US$2 billion acquisition of Habana Labs, an Israel-based artificial intelligence (A.I.) developer, in an effort to improve scaling capabilities of processors and accelerators for A.I. workloads.
This acquisition follows shortly after Intel’s Capital Group led a US$75 million investment in Habana Labs last year. The investment provided the opportunity for both companies to collaborate for a period of time, which led to Habana Labs officially combining with Intel.
Intel forecasts a US$25 billion market for the A.I. silicon market by 2024, of which more than US$10 billion is expected to be attributed from silicon used for data centres. In 2019, Intel expects to generate US$3.5 billion from its A.I. offerings, a 20% growth year-over-year.
Habana will support Intel’s goal of scaling its A.I. business though its Habana Gaudi A.I. Training Processor, which is able to outperform processors with the same number of GPUs by up to 4x the throughput efficiency. Another important differentiator of Habana’s Gaudi chip is its Remote Direct Memory Access (RDMA), which allows one computer to access memory from another computer without taxing the central processor.
Intel’s Executive VP of the Data Platforms Group, Navin Shenoy, who oversees Intel’s portfolio of A.I. technologies, states: “Habana turbo-charges our AI offerings for the data center with a high-performance training processor family and a standards-based programming environment to address evolving AI workloads.”
Habana expects no organizational changes after the acquisition. Its current management team will be leading the subsidiary from Israel as an independent business unit reporting to Intel’s Data Platforms Group.
As Intel puts more focus on its data centre business due to declining computer sales, it will go head-to-head with competitors such as Amazon.com, Inc. (NASDAQ:AMZN) and NVIDIA Corporation (NASDAQ:NVDA)..
Intel Corporation (NASDAQ:INTC)
- www.intel.com
- Headquartered in Santa Clara, United States, Intel Corporation designs, manufactures, and sells computer components and software, including chipsets, embedded processors, flash memory, microprocessors, graphic & network communication products, and digital imaging solutions.
- Intel’s products are used in notebooks and desktops, cloud, enterprise, data center, and communication infrastructure market, in various verticals including automotive, business, industrial, military, and retail.
- Intel Corporation is currently trading at $58.95 with a market cap of $256.4 billion.
Figure 1: Intel 1-Year Stock Chart
