Intel splashes $2bn out on AI chip startup

Vendor expects increased focus on artificial intelligence to reap $3.5bn in revenue this year

Intel has coughed up $2bn for Israeli artificial intelligence (AI) semiconductor startup Habana Labs.

The acquisition will "strengthen" Intel's AI-driven portfolio and accelerate its efforts in the AI silicon market which it expects to be worth more than $25bn by 2024.

Habana was founded in 2016 by David Dahan and Ran Halutz and raised $75m in funding last year and counted the vendor among its investors before this acquisition. It will remain an independent unit, led by its current management team, and will report to Intel's Data Platforms Group, which houses the chipmaker's AI technologies.

"This acquisition advances our AI strategy, which is to provide customers with solutions to fit every performance need - from the intelligent edge to the datacentre," said Navin Shenoy, executive vice president and general manager of the Data Platforms Group at Intel.

"More specifically, Habana turbo-charges our AI offerings for the datacentre with a high-performance training processor family and a standards-based programming environment to address evolving AI workloads.

"We know that customers are looking for ease of programmability with purpose-built AI solutions, as well as superior, scalable performance on a wide variety of workloads and neural network topologies.

"That's why we're thrilled to have an AI team of Habana's calibre with a proven track record of execution joining Intel. Our combined IP and expertise will deliver unmatched computing performance and efficiency for AI workloads in the datacentre."

The vendor has been concentrating on the datacentre market as its ongoing CPU shortage continues to affect its PC sales.

Partner Dell recently called it out as a factor that will negatively impact its revenues for the rest of its fiscal year.

Intel expects to generate over $3.5 billion in AI-driven revenue in 2019, up more than 20 per cent year on year. It anticipates that the addition of Habana will boost this further.

Habana co-founder and CEO Dahan added: "We have been fortunate to get to know and collaborate with Intel given its investment in Habana, and we're thrilled to be officially joining the team.

"Intel has created a world-class AI team and capability. We are excited to partner with Intel to accelerate and scale our business. Together, we will deliver our customers more AI innovation, faster."