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Intel vs. Nvidia: The Battle for AI Chip Dominance Begins

EconomyIntel vs. Nvidia: The Battle for AI Chip Dominance Begins
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Intel, the largest semiconductor company in the U.S., has announced the development of a new artificial intelligence (AI) dedicated chip. This will challenge Nvidia, which dominates over 80% of the AI chip market.

Consequently, Nvidia’s stock suffered a 2.04% drop, closing at $853.54 on the New York Stock Exchange on September 9th (local time). This is more than a 9% plunge from its peak ($953).

Yahoo Finance Compilation

In contrast, Intel’s stock rose by 0.92% to $38.33.

At the Vision Event held on the same day, Intel unveiled Gaudi 3, an AI-dedicated chip. Intel claims that Gaudi 3 can train large language models 50% faster than Nvidia’s previous version, the H100, while reducing power consumption by 100%.

The H100 is Nvidia’s most popular AI-dedicated chip, used by most prominent tech companies, including Microsoft Corporation and Google.

Gaudi 3 may not match the performance of Blackwell, Nvidia’s recent release, but it is known to outperform the previous H100 version.

At the event, Patrick (Pat) Gelsinger, CEO of Intel Corporation, stated, “Nvidia is a good competitor, but people want alternatives. The world needs more suppliers, and we’re doing our best to provide consumers with choices.”

© News1

While he refused to disclose the price, he mentioned it would be “much cheaper than Nvidia’s chips.”

This is Intel’s challenge to the AI-dedicated chip market, which Nvidia has virtually monopolized until now.

In addition, big tech companies such as Microsoft, Google, Amazon, and Meta Platforms are all developing their AI-dedicated chips to reduce their dependence on Nvidia.

This could shake Nvidia’s dominance in the AI-dedicated chip market.

However, most experts believe breaking Nvidia’s stronghold in the AI chip market will take considerable time, as Nvidia is far ahead of other companies in this field.

Intel’s decision to enter this market is a positive step towards supply diversification.

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