Intel first talked about its third-generation Gaudi AI accelerators in April, then officially launched it in late September alongside its Xeon 6 CPUs. Throughout this period, Intel has been positioning Gaudi 3 as a more affordable competitor to Nvidia's H100 accelerators, and it still is. But now the company is making it explicit that it is not looking to compete with Nvidia on outright performance but more on cost and overall value.
Intel made its stance on Gaudi 3's value proposition crystal clear in a recent interview with CRN (flagged by Wccftech). The site quotes Intel CEO Pat Gelsinger as saying it won't be "competing anytime soon for high-end training" against Nvidia, which means it won't be taking on AMD's just-announced MI325X accelerator either. Instead, the company will focus on businesses with less audacious AI demands, which could be a sizable market.
In the interview, Anil Nanduri, who is the head of Intel's AI business, rightly noted that so far, companies have been making AI purchasing decisions based almost solely on performance. That has allowed Nvidia's earnings to surge in the past year, but now Mr. Nanduri says companies are starting to consider overall cost as well. Nanduri says companies are beginning to question the return on investment, the power costs, and how expensive it is to go all-in in training large models.
Justin Hotard, an Intel executive and veteran of HP's enterprise business, says Gaudi 3's cost-effective design is a response to what its enterprise customers have told Intel it needs. He notes enterprise customers are telling him they want to build their own inferencing solutions, and Gaudi 3's open ecosystem approach makes that easier. This directly contrasts Nvidia's propriety approach, as Intel uses open standards like Ethernet and PCI Express, giving companies more flexibility in choosing appropriate hardware to scale their operation.
Intel has stated that it expects to earn around $500 million in revenue from Gaudi 3 in 2024, considerably less than rivals AMD and Nvidia. For context, Nvidia earned $26 billion for its data center business in just the past quarter, to give you an idea of how Intel competes with Nvidia in this arena. AMD hasn't released its Q3 earnings yet, but it earned $2.8 billion in revenue in Q2 for its data center business.