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Intel vs. AI Giants: Closing the Gap or Falling Further Behind?

Last Updated March 5, 2024 2:52 PM
Giuseppe Ciccomascolo
Last Updated March 5, 2024 2:52 PM

Key Takeaways

  • Intel is making efforts to regain its leading position in the tech industry. 
  • It’s working on filling the gap with giants like Nvidia.
  • Intel and Nvidia are currently competitors, but is there any chance that they could cooperate?

Intel has not been a top-performing stock  in recent years. Over the past decade, Intel’s total return, including dividend payments, has been approximately 140%. In comparison, the Nasdaq 100 has delivered a total return  of around 465% during the same period.

This underperformance is primarily attributed to Intel falling behind in technology advancements. However, there is potential for a turnaround following Intel’s acquisition of a new machine.

So, the question arises: if Intel can regain its leading position, could it potentially experience a surge similar to Nvidia‘s?

Intel Still Behind Nvidia In AI-Chip Race

Intel  is actively competing in the global AI chip market to keep pace with industry leaders like Nvidia. In its recent second-quarter earnings report, Intel showcased its determination to challenge Nvidia’s dominance. Despite improved revenue, Intel is intensifying its chip production to bolster its position in artificial intelligence (AI) technology. Intel CEO, Pat Gelsinger, emphasized  AI integration as a key focus for Intel’s future products, highlighting the company’s readiness to seize opportunities in the expanding AI landscape.

In a significant move, Intel unveiled plans to release its inaugural chip featuring an in-built neural processor specifically designed for machine learning tasks, dubbed Meteor Lake . This milestone marks Intel’s foray into dedicated AI engines within its processors, signaling a strategic shift towards AI-centric innovation.

Gelsinger’s remarks underscored Intel’s holistic approach to AI adoption, spanning consumer, developer, and enterprise domains. He highlighted the impending surge in AI-driven functionalities across various sectors, with a particular focus on client-centered applications.

To support its ambitious chip production goals, Intel has strategically chosen  Wroclaw, Poland, as the location for its upcoming $4.6 billion semiconductor facility. This strategic investment aims to address the mounting demand for assembly and testing capacity, positioning Intel for sustained growth and competitiveness in the semiconductor landscape by 2027.

Microsoft To The Rescue Of Intel

Microsoft is enlisting the expertise of semiconductor pioneer Intel as it accelerates its chip production endeavors in pursuit of advancing AI models. The collaboration between the two tech giants entails leveraging Intel’s cutting-edge 18A manufacturing technology to develop a forthcoming chip designed in-house by Microsoft. Although the specific application of this chip remains undisclosed, the partnership signifies a strategic alignment between Microsoft and Intel in the realm of semiconductor innovation.

For Intel, teaming up with Microsoft, a prominent buyer of AI chips, represents a significant opportunity to bolster its bespoke chip business amid fierce competition from industry leaders like Taiwan Semiconductor Manufacturing Company (TSMC ) and Nvidia, a prominent player in both AI and chip manufacturing.

Expressing enthusiasm about the collaboration, a spokesperson for Intel remarked : “We are delighted that Microsoft has selected a chip to design using Intel 18A process technology,” highlighting the mutual commitment to driving technological innovation forward.

Following the global success of ChatGPT, major tech companies like Microsoft and Google are aggressively developing their proprietary AI solutions. This heightened competition has sparked increased demand for Nvidia’s AI chips. They’re crucial for creating chatbots and other AI applications, resulting in significant profits for the company.

However, the surging demand has also highlighted the difficulty in meeting supply needs for Nvidia’s advanced chips. And this presented a bottleneck for tech firms aiming to leverage AI-driven innovation.

Who Has The Best Products?

When comparing Nvidia and Intel products, Intel’s powerful CPUs are often preferred for their superior architecture , hardware, and frequent updates from dedicated developers. Intel CPUs excel in performance across various tasks, including demanding professional and creative workloads. The latest Raptor Lake chips reinforce Intel’s performance superiority, albeit at a premium price point, offering unparalleled performance that justifies the investment.

For high-performance GPUs tailored for gaming, Nvidia stands out as the preferred option. Nvidia’s graphics cards are known for their ability to handle 4K gaming at 60FPS or higher, with the RTX Series featuring advanced ray tracing and AI upscaling capabilities. Its focus on AI technology has led to surpassing both AMD and Intel counterparts in gaming and graphics-intensive tasks. The flagship RTX Series is essential for gamers looking for top-tier visuals, offering enhanced realism and immersive gaming experiences through ray tracing.

In the gaming landscape, Intel maintains an edge in overall performance. Intel’s Core i9-13900K, particularly when paired with faster DDR5 RAM and overclocked, offers exceptional performance tailored for hardcore gamers and demanding users. The Core i7-14700K provides a compelling alternative, delivering impressive performance at a lower cost. This makes it a suitable choice for most users seeking high-performance CPUs.

But Nvidia’s ray-tracing graphics cards surpass them with superior upscaling and performance-enhancing AI features. Its GeForce RTX 4070, alongside the 4070Ti variant, exemplifies this superiority, providing smoother gameplay and enhanced visuals through technologies like DLSS 3 and G-Sync. For gamers seeking optimal gaming experiences with stunning visuals, Nvidia’s high-end GPUs remain the go-to choice.

Can Intel And Nvidia Cooperate?

Can Nvidia and Intel form a collaborative partnership rather than remain solely competitors?

Nvidia has a history of partnering with semiconductor manufacturers like TSMC and Samsung to produce GPUs and other products. During a recent financial conference, Nvidia’s CFO, Colette Kress, hinted  at the possibility of expanding partnerships, potentially including Intel.

Nvidia has engaged in discussions with Intel, facing high demand for GPUs, especially for artificial intelligence applications. Addressing this demand involves not only increasing production but also developing advanced packaging solutions for optimal chip functionality. Despite TSMC’s efforts to address production constraints, demand exceeds supply. This leads Nvidia to consider diversifying its partner ecosystem beyond TSMC and Samsung.

Intel emerges as a compelling candidate for collaboration due to its robust roadmap of production processes. It aligns with industry expectations in terms of timing and quality. Additionally, Intel boasts a suite of packaging technologies, including EMIB and Foveros Direct, offering flexibility during the design phase.

Intel’s commitment to strengthening its fabrication ecosystem, particularly in the United States and Europe, adds to its appeal as a potential partner  for Nvidia.

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