TAIPEI/SAN FRANCISCO – In a strategic move to regain market share in the data center sector, Intel introduced its latest generation of Xeon server processors on Tuesday. Alongside this, the company announced that its Gaudi 3 artificial intelligence accelerator chips would be priced significantly lower than those of its competitors.
The release of the sixth generation Xeon chips is critical for Intel, which has faced declining market share in the data center industry, particularly against AMD. According to Mercury Research, Intel’s share of the x86 chip market for data centers has decreased by 5.6 percentage points over the past year, now standing at 76.4%, while AMD has grown to 23.6%.
One of the primary reasons for Intel’s market share loss has been challenges with its manufacturing processes, which have enabled AMD to gain ground by utilizing Taiwan Semiconductor Manufacturing Co. (TSMC) for its chip fabrication.
The new Xeon 6 server processors are available in two main variants: a larger, more powerful version, and an “efficiency” model aimed at replacing older-generation chips. Intel emphasizes that the efficiency model can achieve the same computing power as its second-generation chips with about 67% fewer server racks. This model is designed for applications such as media streaming, web hosting, and database calculations.
Key Features of Xeon 6 Processors:
- Efficiency Model: Targets media, web services, and database operations.
- Performance Model: Built for complex AI computations and high-demand tasks.
- Availability: Efficiency model available immediately; performance model arriving in Q3.
- Future Variants: Additional models to be launched next year.
The performance model, on the other hand, is tailored for demanding tasks that require substantial computing power, such as running complex AI models. This model is expected to be available in the third quarter, with more variations planned for release next year. The sixth-generation chip was delayed by a year due to Intel’s decision to employ a different manufacturing process.
In addition to the Xeon processors, Intel also highlighted its Gaudi 3 AI accelerator chips. During a briefing call, Intel disclosed that a Gaudi 3 accelerator kit, which includes eight AI chips, is priced at approximately $125,000. In comparison, the previous generation Gaudi 2 kit lists for $65,000.
While AMD and Nvidia typically do not discuss their chip pricing publicly, a comparable HGX server system equipped with eight Nvidia H100 AI chips can exceed $300,000, as noted by custom server vendor Thinkmate.
Intel initially revealed the Gaudi 3 AI chip details in April, positioning it as a cost-effective and competitive alternative to Nvidia’s H100 chips.
Pricing Comparison of AI Accelerator Kits
| AI Accelerator Kit | Number of Chips | Price |
|---|---|---|
| Intel Gaudi 3 | 8 | $125,000 |
| Intel Gaudi 2 | 8 | $65,000 |
| Nvidia H100 (HGX) | 8 | >$300,000 |
In a related announcement on Tuesday, Intel introduced its next-generation laptop chip, dubbed Lunar Lake. This new chip is noted for its impressive power efficiency, utilizing 40% less power while incorporating a more potent AI processor. Intel plans to begin shipping the Lunar Lake chip in the third quarter.
Highlights of Lunar Lake Chip:
- Power Efficiency: Uses 40% less power than previous models.
- Enhanced AI Processing: Includes a more powerful AI processor.
- Shipping Timeline: Expected to ship in the third quarter.
Intel’s strategy with these new releases is clear: to address and overcome the competitive pressures from AMD and Nvidia by offering high-performance, cost-effective alternatives. The introduction of the sixth generation Xeon processors and Gaudi 3 AI accelerators reflects Intel’s commitment to innovation and leadership in the semiconductor industry.
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