Intel announced its new generation Xeon processors Tuesday, as part of its strategy to regain market share in the data center sector. It also revealed that Gaudi 3 artificial-intelligence accelerator chips will be much cheaper than rivals’ chips.
Intel’s sixth-generation Xeon chip is crucial, as it has steadily lost market share in the data center to AMD. Mercury Research data shows that Intel’s data center share for x86 processors has decreased 5.6 percentage points in the last year, to 76.4%. AMD now holds 23.6%.
AMD has taken advantage of Intel’s mistakes in manufacturing by using Taiwan Semiconductor Manufacturing Co.
Intel takes over
Intel’s Xeon server processors are available in two flavors: a more powerful, larger version and a “efficiency” model, which is marketed as a replacement to older generation chips.
The efficiency model is designed to provide media and websites, as well as perform database calculations. It will require 67% less server racks in order to achieve the same computing power of its second-generation chips.
The new performance model will be able to handle the calculations required to generate AI responses and other tasks requiring more horsepower.
The “performance” Xeon chips will be available in the third quarter. Intel will launch more variations in the coming year. The company delayed the sixth generation chip by a year to allow for a new manufacturing process.
Intel told reporters on a conference call that the list price for a Gaudi 3 Accelerator Kit, which contains eight AI chips, is about $125,000. The older generation Gaudi 2 costs $65,000.
Nvidia and AMD do not discuss the pricing for their chips. According to Thinkmate, a similar HGX system with eight Nvidia H100 AI processors can cost over $300,000.
Intel announced the Gaudi 3 AI Chip in April. It is positioned as a cheaper and more viable alternative to Nvidia H100 chips.
Intel announced on Tuesday that its next-generation laptop chip called Lunar Lake uses 40% less energy and contains a more powerful AI processor. Intel has said that it will be shipping the chip by the third quarter.
