Intel Corp has bought Habana Labs, an Israeli start-up that develops chips for artificial intelligence (AI) applications, for about US$2 billion to bolster its efforts in the fast-growing market for AI silicon.
The purchase is the latest in a string of acquisitions aimed at making Intel’s offerings essential to some of the biggest buyers of silicon and fending off rising competitors. Companies such as Alphabet Inc’s Google and Amazon.com Inc’s Amazon Web Services are increasingly designing their own chips to manage the explosion of information flowing through their data centers using techniques such as machine learning.
Intel’s central processor units still handle the vast majority of data created by Internet traffic, but the company is facing customers and rivals that are trying non-standard approaches using different types of chips.
The biggest chipmaker in the US has responded by acquiring some of the semiconductor start-ups that threaten the stranglehold Intel has with its Xeon range, a product dominant for 20 years.
“This is an early stage market that’s growing incredibly fast,” Intel Data Platforms Group executive vice president Navin Shenoy said. “At this point, we have a relatively small share. We’re going to be aggressive going after this.”
The market for a new way of handling data is only just getting going and represents a huge opportunity for the industry, Shenoy added.
While three-year-old Habana has only just delivered its first chip, Intel saw the chance to acquire a pool of talented engineers and jumped at it, he said.
Habana’s products are aimed specifically at large data centers, where they chain together other semiconductors to create more powerful processing capabilities. The company has about 180 employees.
For now, the start-up is to remain independent with its leadership reporting to Shenoy, Shenoy said.
Intel said that it expects to generate more than US$3.5 billion in AI-driven revenue this year, up more than 20 percent from a year earlier.
The company is seeking to expand in other products as demand for PC chips slows.
On Monday, Intel said that it expects the AI silicon market to exceed US$25 billion by 2024.
Habana is to remain based in Israel, where Intel also has operations and investments, the company said.
Intel Capital was previously an investor in Habana.
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