Intel seems to be making a comeback in the AI space after its shares jumped 4% following the announcement of a major deal with Amazon Web Services.
This is the first positive news since the firm slashed its workforce by 15% earlier this year.
CEO Pat Gelsinger heralded the deal suggesting it would “unleash innovation” across the companies' shared ecosystem and support the growth of both AWS and Intel’s businesses.
The partnership will see AWS invest in a multi-billion dollar framework over several years, with Intel developing an AI fabric chip for AWS on Intel 18A, which is the height of Intel’s processing capabilities according to the firm.
Additionally, Intel will produce a custom Xeon 6 chip on Intel 3, building on an existing partnership in which Intel produces Xeon Scalable processors for the cloud computing giant.
Intel said it was a “significant expansion” of the firm’s collaboration that will help both company's customers to “power virtually any workload and accelerate the performance of artificial intelligence (AI) applications”.
With a focus on the US economy, both firms also expressed their commitment to the state of Ohio. Intel said it remains “committed” to the New Albany area, while AWS said it's planning to invest a further $7.8 billion to expand its data center operations in the state.
Both Intel and AWS will continue to explore new designs based on Intel 18A, as well as on future process nodes including Intel 18AP and Intel 14A. These are expected to be designed in the Ohio facilities.
Intel bounces back
In August, Intel announced mass layoffs that saw 15,000 staff members put out of a job. At the time Gelsigner cited poor returns on AI, with the firm needing to cut costs to improve finances.
He said that Intel’s “cost structure” needed to be aligned with its new operating model to curb flagging revenue growth and further capitalize on “powerful trends, like AI.”
Speaking to ITPro at the time, Gartner analyst Alan Priestley argued that Intel needed to “revisit” its product side and create something more “broadly accepted” in the AI development community to stay competitive.
He added that, while Intel had missed its chance to ride the initial boom in AI technology, it still had an opportunity to capitalize if it were to get “its story right and its product right.”
While it’s still got some distance to go to catch up with the likes of Nvidia, this latest partnership with AWS seems to suggest that Intel is at least changing its “story” in the AI space.
In a separate message posted by Gelsinger following news of the AWS deal, the Intel CEO said that the firm still has “a lot of work ahead to drive greater efficiency, improve our profitability, and enhance our market competitiveness.”
As he noted, this latest partnership will “support” the firm’s priorities. The move will form part of the ongoing mission to bring Intel back from the brink and ideally push the firm forward as a big name in the AI space.
Priestly also mentioned that Intel’s position in the CPU market will always help – “the world can't afford for Intel to fail, because there's nothing to take up the slack,” he said.
