Intel may be getting a much-needed boost to the ambitions of its burgeoning foundry business: The company's venture capital arm said today it is making “strategic” investments in AI-building startups based in Israel and the UK.
Intel Capital is leading a $15 million investment in Buildots, a company that uses AI and computer vision to create digital twins of construction sites. The six-year-old company works with construction giants such as Pomerlau, NCC and Ledcor to regularly capture jobsite data using 360-degree cameras to track project progress, identify bottlenecks and optimize workflows.
Buildots has raised around $106 million to date, with its most recent $60 million round coming two years ago.
Image credit: Buildots
Intel Capital has invested billions of dollars in AI startups over the years, but its decision to buy a stake in BuildOtz is particularly notable now as the parent company steps up efforts to control costs and grow its own manufacturing capabilities.
A few years ago, Intel announced plans to invest $20 billion in two new manufacturing facilities (or “fabs”) at its Ocotillo Campus in Arizona. At the same time, Intel also launched a new foundry business (recently renamed Intel Foundry) with an eye on manufacturing chips designed by other companies.
The two new factories in Arizona, named Fab 52 and Fab 62, are scheduled to be completed by early 2025. But they are among Intel's current large construction projects around the world, including plans for two new factories in Ohio that could cost up to $28 billion. These were originally scheduled to start coming to fruition in 2025, but the company recently announced that it had to delay those plans by a year, citing “market challenges.”
Efficiency
Intel is something of a construction giant, currently spending about $100 billion on new builds and renovations in four U.S. states alone. But pressure is mounting after the company's recent financial results showed losses in its foundry business widened last year. And the company faced a new setback when regulatory hurdles forced it to call off a $5.4 billion merger with contract chipmaker Tower Semiconductor. (Instead, the two companies formed a commercial partnership, with Intel providing foundry services to Tower Semiconductor as part of a $300 million investment.)
To support all of these manufacturing activities, Intel is set to receive $8.5 billion in government funding as part of a U.S. plan to, in effect, “in-house” more chip manufacturing.
But one of the best ways to cut costs is by improving efficiency, and Buildots can help here: just recently the company announced a new AI-powered “Delay Prediction” feature that it claims can help project managers get ahead of delays by predicting when they might happen.
At the time of its release, Buildots said that during beta testing at major construction sites, the delay prediction feature was able to reduce delay times by up to 50% in some scenarios.
Buildots Delay Forecast Image Credit: Buildots
Historically, the construction industry has always been seen as slower to adopt digitalization than other industries. This is due in part to the complexity and uniqueness of each project and the need for coordination between multiple stakeholders, including architects, contractors, engineers, suppliers, and regulators. However, there are signs that this is changing, especially with the advent of AI. While AI can't build skyscrapers, it does show some promise in helping to shorten operational timelines.
Neither Intel nor Buildots would directly confirm whether they were already working together, but Buildots has previously hinted at this on social media, talking about working with “industry giants like Intel.”
Lisa Cohen, investment director at Intel Capital, said in a statement to TechCrunch that Intel's own experience in the construction sector helped it understand the need to increase efficiency through technology.
“Intel's first-hand experience working on some of the world's largest and most complex construction projects has undoubtedly played a role in helping us understand the huge potential that AI technology in general, and Buildots in particular, has in revolutionizing construction process management and driving new levels of efficiency,” Cohen said.
As a result of the investment, Cohen will join Buildot's board of directors. Other investors in the round include previous investors, such as Israel's OG Tech Partners, whose names were not disclosed.