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Intel faces challenges at Computex 2024 amid AI expansion

Intel faces challenges at Computex 2024 amid AI expansion

Challenges at Computex

Intel is making waves alongside chip competitors Nvidia and Advanced Micro Devices at the Computex 2024 conference in Taipei, Taiwan, this week. Bank of America Senior Semiconductor Analyst Vivek Arya joins us to discuss some of Intel’s biggest challenges as it attempts to expand and compete within the AI chip market. They have the enterprise incumbency, but they don’t quite have the deployed base or the range of software developers,” Arya notes.

A lot of enterprises, as they start to look towards their AI infrastructure, first turn to Nvidia because of the large pool of developers already familiar with Nvidia’s ecosystem.

When asked about Intel’s strategy, Arya highlights the company’s focus on providing more affordable chips for enterprise customers, instead of targeting hyperscalers. “Their chips are not necessarily for the hyperscalers but for more of the enterprise customers,” he explains. They’re going to be a little bit more affordable.

Despite these efforts, Intel still faces significant obstacles.

Broadly speaking, Intel is facing the challenge of being behind in AI.

Intel’s competition in AI space

They have strong enterprise incumbency, but they lack the deployed base and the range of software developers compared to Nvidia,” Arya says.

The current AI chip market, valued at approximately $100 billion, sees Nvidia holding an 80% market share. Custom chips from companies like Broadcom and Marvell make up another 10-15%. Arya predicts that over the next 3 to 5 years, as the market potentially doubles or triples, Nvidia will likely maintain its dominant market share.

Other players, including Intel and various startups, will benefit from the rising tide but may struggle to achieve the same level of market penetration. “This is not uncommon in other parts of technology,” Arya adds. Whether it’s in search, social, ecommerce, or operating systems, the leader with the early start, scale, and developer relationships often claims over 80% of the market.

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We see the same trend in the AI market.”

As Intel continues to navigate these headwinds, it will be critical to monitor how the company adjusts its strategies to compete more effectively in the rapidly evolving AI chip industry.

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