Intel acquires Israeli AI chipmaker Habana for $2 billion in a bid to boost its data-center business

Intel has been trying to expand it AI portfolio and focus more on its data-center sales lately, as PC sales continue to stagnate

Intel Corp on Monday said in a statement that it has bought Israeli AI chipmaker Habana Labs. The acquisition cost Intel about $2 billion, as the company continues to expand its Artificial Intelligence portfolio in a bid to boost its data-center business.

Intel's acquisition of Habana Labs is the latest in its series of AI acquisitions in the last few years that includes names like Movidius and Nervana Systems. Havana Labs specializes in developing programmable deep learning accelerators for data centers.

Intel has been increasing focusing on AI as the AI chip market continues to grow at a rapid pace. Moreover, it makes sense for Intel to focus more on this area given that PC sales have been stagnating for quite some time now.

A well-planned move

Intel YouTube Grab

The Tel Aviv based Habana Labs said in July that its Gaudi AI training processor was capable of beating GPU-based systems by 4x. Intel, reportedly, was eyeing Habana Labs since then, as it wants to bolster its data-center business.

Intel itself has been tasting success lately with it AI offering. The chipmaker's AI-driven revenues recorded $3.5 billion, a 20% jump from 2018. Moreover, the company has been trying to strengthen its data center offerings and plans to add more muscle to it, as PC sales continue to slow.

"This acquisition advances our AI strategy, which is to provide customers with solutions to fit every performance need – from the intelligent edge to the data center," Intel EVP Navin Shenoy said in a statement, according to Globes.

Does the acquisition make sense?

Intel Pixabay

Intel doesn't want to lag in the AI chip market, with its biggest rival Nvidia too going for similar acquisitions. The AI chip market is expected to surpass $25 billion by 2024 and Intel wants fast expand its AI portfolio in a bid to grab a bigger share of the pie. Moreover, Intel Capital was already an investor in Habana.

Intel's biggest rival is Nvidia. Habana's Gaudi AI learning processor, according to the company, can offers faster processing speed to compete with similar products from Nvidia. Interestingly, Nvidia also bought Israeli chipmaker Mellanox for $6.9 billion in March in a bid to bolster its data-center chip business.

Moreover, Intel's acquisition of an Israeli AI training processor making company given that it has a sizeable presence in that country. Intel is the largest employer in Israel in the private sector. Habana Labs will continue as an independent business unit in Israel and will be led by its present management team.

Related topics : Artificial intelligence