Max A. Cherny and Stephen Nellis
TAIPEI/SAN FRANCISCO – Intel (NASDAQ:) unveiled its next-generation Xeon server processors on Tuesday as it seeks to regain data center market share and said its Gaudi 3 artificial intelligence accelerator chips will cost much less than rival chips.
Sixth-generation Xeon chips are critical for Intel, which has been slowly losing data center market share to AMD (NASDAQ:). According to Mercury Research, Intel’s share of the x86 data center market has fallen 5.6 percentage points over the past year to 76.4%, with AMD’s share now at 23.6%.
Disruptions in Intel’s manufacturing process have allowed AMD to take over the business as it uses a Taiwanese semiconductor company to make its chips.
The Xeon 6 server processors come in two main flavors: a larger, more powerful version and an “efficiency” model that Intel introduced as a replacement for the previous generation of chips.
Achieving the same level of processing power as second-generation chips will now require approximately 67% fewer server racks, with an efficiency model that is designed to serve media, websites, and database computing.
The more powerful performance model is designed to handle the calculations needed to generate responses from complex AI models and other tasks that require increased power.
The performance Xeon chip will be available on Tuesday, and the “performance” model will arrive in the third quarter. Intel plans to release additional variants next year. The release of the sixth-generation chip was delayed by a year because the company wanted to use a different manufacturing process.
In a briefing with reporters, Intel said the Gaudi 3 accelerator kit, which includes eight AI chips, sells for about $125,000, compared with the list price of the earlier generation Gaudi 2 at $65,000.
AMD and Nvidia (NASDAQ:) do not discuss prices for their chips. A comparable HGX server system with eight Nvidia H100 AI chips could cost more than $300,000, according to custom server maker Thinkmate.
In April, Intel revealed details about the Gaudi 3 AI chip and positioned it as a significantly cheaper and viable alternative to Nvidia’s H100 chips.
Also on Tuesday, Intel said its next-generation laptop chip, called Lunar Lake, uses 40% less power and contains a more powerful artificial intelligence processor. Intel said it would ship the chip in the third quarter.