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Intel’s New AI Strategy Under CEO Lip-Bu Tan
(Reuters) – Intel has faced significant challenges in the past decade, particularly in failing to contest Nvidia’s stronghold in the burgeoning artificial intelligence (AI) chip market. As Intel’s new CEO, Lip-Bu Tan, addresses this critical issue, he emphasizes that reversing the company’s fortunes will not be an instantaneous process.
In his inaugural earnings call with analysts, Tan expressed his commitment to reassessing Intel’s existing product lineup to better align with the evolving demands of the AI industry, including advances in robotics and intelligent systems capable of performing tasks on behalf of users.
This initiative is expected to present considerable obstacles, particularly because Nvidia’s strategy has evolved beyond just chip sales to encompass entire data center solutions, offering everything from hardware components to sophisticated software. In response, Tan indicated that Intel aims to adopt a similar comprehensive approach.
Chief Financial Officer David Zinsner acknowledged that Intel’s immediate focus will not revolve around acquiring new companies but rather on improving its financial standing. “Our priority will need to be, at this point, getting the balance sheet to a better place,” Zinsner noted in a recent interview.
This suggests that Tan’s strategy for establishing a coherent AI initiative will primarily be developed internally. He stated, “We are taking a holistic approach to redefine our portfolio, to optimize our products for new and emerging AI workloads. Our goal is to become the platform of choice for our customers. This requires us to radically evolve our design and engineering mindset and anticipate the needs of our customers well in advance.”
Traditionally, Intel has relied on acquiring AI startups to enhance its chip development capabilities. Between 2016 and 2019, the company made several acquisitions, including Movidius, Mobileye, Nervana, and Habana Labs, aiming to bolster its presence in the AI domain. However, while Mobileye has successfully maintained its role in the autonomous driving sector, the other acquisitions have not yielded the expected competitive advantage against Nvidia.
Bob O’Donnell, chief analyst at Technalysis Research, remarked on Intel’s historical strengths in developing silicon internally. “I’m not shocked to see them focus on in-house developments for AI,” he stated. “If they can build the appropriate set of software support to help make it easy to deploy these new chips, then they have a chance—but that is a big if.”
However, some analysts remain skeptical. They point out that Nvidia’s current market dominance, coupled with the initiatives undertaken by major cloud providers like Amazon and Google to develop proprietary AI chips, creates a challenging landscape for Intel to penetrate the market effectively.
Intel has hinted at its broader AI ambitions, with plans to focus on chips and systems capable of supporting AI applications and edge devices, as noted by Hendi Susanto, a portfolio manager at Gabelli Funds, which holds shares in Intel. “While these areas show promise, the scale and pace of their growth remain uncertain,” Susanto cautioned.
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finance.yahoo.com