Intel has found IBM Cloud as its first cloud customer for its Gaudi 3 AI accelerator chip.
IBM and Intel announced Thursday that IBM Cloud will begin offering Gaudi 3 to customers early next year. The chip's accelerators will be available in both hybrid and on-premise environments, and IBM said it plans to enable support for Gaudi 3 within its Watsonx AI and data platform.
“Unleashing the full potential of AI requires an open, collaborative ecosystem that gives customers choice and accessible solutions,” Justin Hotard, general manager of Intel's Data Center and AI division, said in a statement. “By integrating our Gaudi 3 AI accelerators and Xeon CPUs into IBM Cloud, we are creating new AI capabilities to meet the demand for affordable, secure and innovative AI computing solutions.”
Gaudi 3, announced in December 2023, was meant to be Intel's answer to AI chips from rivals Nvidia and AMD. It would be the final product in the Gaudi series of accelerators that Intel acquired through its $2 billion acquisition of Habana Labs in 2019.
Earlier this year, Intel unveiled its Gaudi 3 reference design for use in servers by partners such as Lenovo, Dell, HPE and Super Micro. The design includes a new form of Ethernet connection designed to rival Nvidia's InfiniBand connection technology, and pairs the Gaudi 3 chips with Intel's Xeon 6 processor series.
But Gaudi 3 arrives at a precarious time for Intel, which is severely disadvantaged by Nvidia's dominance.
Intel said in April that it expects $500 million in revenue from Gaudi 3 in 2024, a pittance compared to AMD's $3.5 billion in sales of its Instinct MI 300 series GPUs and Nvidia's $40 billion from its data center business. Early benchmarks have shown that Gaudi 3 offers surprisingly good value for money, but it will be hard to win over customers who already have strong relationships with Nvidia.
In July, Intel CTO Greg Lavender spoke optimistically about the company's ability to become No. 2 in the AI chip market behind Nvidia. A month later, after posting a $1.6 billion loss in the second quarter, Intel announced it would cut 15,000 jobs and aggressively cut costs to save $10 billion by 2025.
Making things worse for Intel, Nvidia is set to ramp up production of its next-generation AI chip, Blackwell, in the fourth quarter after a brief manufacturing delay. Blackwell is up to four times more powerful than the Gaudi 3's leading chip, the H100.
Intel stressed that it would not provide a comparison with Blackwell, saying it would not be able to do so until Blackwell's chips are available to the public.