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Wednesday, September 27, 2023

Intel, playing catch-up, seeks to bring AI to the PC

Trailing badly in the race to enable the most advanced artificial intelligence computers, Intel wants to stake out the middle of the AI market instead.

At Intel’s annual technology showcase Tuesday in San Jose, CEO Pat Gelsinger touted the opportunities created by artificial intelligence – from video encoding to medial research. And he said artificial intelligence could produce a new wave of demand for Intel’s PC chips as desktop computers develop new capabilities.

“AI is fundamentally restructuring science,” Gelsinger said in Tuesday’s keynote address. “We also believe it ushers in the next generation of the PC.”

Many tasks now offloaded to high-wattage computers in far-flung data centers could soon be done by “AI PCs,” desktops and laptops running Intel chips.

On Tuesday, Gelsinger showed off PCs performing popular artificial intelligence tasks. One created a computer-generated image of a giraffe wearing a hat. Another tried to replicate the sound of a Taylor Swift song. (The result sounded nothing like Swift, more closely resembling a badly autotuned power-pop number.)

Rival semiconductor company Nvidia has spent years focusing on artificial intelligence and dominates the emerging market for that technology. Gelsinger has acknowledged previously that Intel is playing from behind.

On Tuesday, though, he outlined three years of planned advancements in its artificial intelligence chip, Gaudi, that Intel hopes will close the gap in AI computing. And by making artificial intelligence readily available to technology consumers, Gelsinger said he anticipates new applications for AI that will revive interest in the PC.

“What’s the killer app? Hey, it may not have been invented yet,” Gelsinger told investment analysts after his opening keynote. “When you start shipping these things in hundreds of millions of units, creative things happen.”

Also Tuesday, Gelsinger sought to reassure investors about the company’s technology roadmap and spending plans. He said Intel remains on track to produce four new generations of chip technology in five years, through 2025.

And Gelsinger said the company has applied for unspecified federal funding to support $100 billion in new spending on U.S. factories, including a major expansion Intel plans in Oregon over the next several years.

Intel’s share price lost more than half its value in the 18 months after the company hired Gelsinger to run the business in 2021. Investors were turned off by the billions of dollars he planned to spend on new factories while seeking to restore Intel’s technology prowess and expand into contract manufacturing.

Sales fell by more than 20% last year as rivals took market share from Intel and the global economy cooled.

Intel says sales began recovering over the summer and its stock has recovered somewhat this year, reflecting growing confidence in the PC market and increased optimism about Gelsinger’s turnaround strategy. Shares are up 40% since the end of February (though the stock fell 3.5% Tuesday morning, as investors appeared to find little new in Gelsinger’s presentation and were discouraged by a middling financial update in comments by company executives after the keynote.)

On Monday, Intel unveiled new technology that uses glass substrates for its chips instead of organic materials. The company said the new technology enables more powerful chips, with more densely packed features. Gelsinger said Tuesday he believes the company is several years ahead in that technology.

It’s part of his long-term plan to advance Intel’s technology while diversifying its business into other markets, including opening its factories to other chipmakers who would use Intel’s technology to make their own products.

Intel is rebuilding itself, Gelsinger said, to serve more markets in more ways.

“That’s the Intel of the future,” he said.

— Mike Rogoway | [email protected] | 503-294-7699

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