According to a report from Wccftech, Intel has stepped away from competing with NVIDIA in AI computing power and the market of training large-scale AI models. Instead, the company is now entering a less saturated segment of the AI market, focusing on its new cost-effective AI accelerator, Gaudi 3.

Intel aims to present Gaudi 3 as the product with the best price-to-performance ratio, though Gaudi 3 is “not catching up” to NVIDIA’s latest GPU from a head-to-head performance standpoint, citing the words from Anil Nanduri, head of Intel’s AI acceleration office, during an interview with CRN.

Nevertheless, Nanduri highlights that the Gaudi 3 accelerator chip is ideal for supporting cost-effective systems that run task-based and open-source models for enterprises.

On the other hand, according to the report from Wccftech, Intel claims that following the introduction of “reasoning-focused” LLM models, its Gaudi 3 lineup delivers performance comparable to NVIDIA’s well-known H100 AI accelerator, especially in inference workloads.

According to the report from CRN, Intel claims that Gaudi 3 is about 9% faster than H100 in the Llama 3 model and 80% more cost-effective; in the Llama 2 model, Gaudi 3 is 19% faster and the price-performance difference is up to 2 times.

However, when evaluated in terms of floating-point operations, the Gaudi 3 AI GPUs fall short compared to NVIDIA’s options, indicating that high-end AI performance isn’t currently Intel’s strength.

Therefore, according to the report from Wccftech, Intel has no plans to compete directly with NVIDIA’s GPUs. Furthermore, there is another rising competitor in the AI computing sector: AMD.

Regarding the reason behind Intel’s choice, the company believes that smaller LLM models will see increased acceptance as the initial excitement around AI and the buzz surrounding large-scale data centers diminish, as indicated by the report in Wccftech.

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• [News] Intel May Cut Gaudi 3’s 2025 Shipment Target by 30%, Raising Concerns for TSMC, ASE, and Alchip

(Photo credit: Intel)

To turn adversity around, Intel launched its latest AI accelerator, Gaudi 3, in late September. However, a report by the Economic Daily News indicates that the struggling giant has significantly slashed the chip’s shipment targets by over 30% for next year, which may severely impact orders for its Taiwanese supply chain.

According to the report, the move could be attributed to the Intel’s internal strategy adjustments and the fluctuation of customer demand, which prompts it to cut orders on Taiwanese companies such as TSMC, ASE Technology, and ASIC firm Alchip.

According to industrial sources cited by the report, Intel originally projected to ship 300K to 350K units of Gaudi 3 in 2025. However, the target has now been revised to 200K to 250K units, marking a reduction of more than 30%.

According to the report, after acquiring Israel-based AI chip company Habana Labs in 2019, Intel seems to be relatively conservative about their co-development of the next-gen AI accelerators. Intel’s cautious attitude is evident from its recent moves, such as expediting the conclusion of previous projects like Gaudi 2, as well as lowering the shipment target for Gaudi 3 next year.

Intel declined to comment on the matter, the report notes.

According to industrial sources cited by the report, the adjustment will pose limited impact to TSMC, which manufactures Intel’s Gaudi 3 with its 5nm node. While the demand for the foundry leader’s advanced nodes remains robust, other customers are expected to quickly fill the gap left by Intel.

In terms of IC packaging and testing services provider ASE and its subsidiary SPIL, as they also have a diversified client portfolio, with major tech companies placing orders, the capacity can be swiftly reallocated to minimize the impact, the report suggests.

Nevertheless, for those with smaller scales and a higher client concentration, the impact may be more significant. Taiwanese ASIC firm Alchip, which provides ASIC design services for Intel’s Gaudi 2 and Gaudi 3, therefore, may be more vulnerable to Intel’s potential shipment reduction, according to the report.

Unimicron, which serves as the primary supplier of substrates for Intel’s chips, may also be impacted by the fluctuation of Intel’s orders, the report notes. However, when asked about the potential impact, the company reaffirms its optimistic outlook regarding the second half of 2024, as it expects the demand for AI accelerators and optical modules to be stronger than the first half.

Currently, NVIDIA still holds the throne in the global AI chip market, with rivals such as AMD and Intel eagerly trying to catch up.

Intel’s latest effort, Gaudi 3, boasts 64 Tensor processor cores (TPCs) and eight matrix multiplication engines (MMEs) to accelerate deep neural network computations, and is specifically optimized for large-scale generative AI, according to its press release. It even claims to offer double the performance at the same cost compared to NVIDIA’s H100, the report says.

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(Photo credit: Intel)

Under pressure from US restrictions, Intel is reportedly preparing to follow in NVIDIA’s footsteps by developing “special edition” versions of its AI acceleration chips, Gaudi 3, for the Chinese market. These two related products are rumored to be launched at the end of June and the end of September.

According to reports from The Register, Intel recently unveiled its new generation AI acceleration chip, Gaudi 3. Intel stated in the Gaudi 3 white paper that it is preparing to launch a special edition Gaudi 3 tailored for the Chinese market. This would include two hardware variants: the HL-328 OAM-compatible Mezzanine Card and the HL-388 PCIe Accelerator Card. The HL-328 is said to be scheduled for release on June 24, while the HL-388 follow suit on September 24.

In regard of the specifications, the made-for-China edition and the original version share the same features, including 96MB of on-chip SRAM memory, 128GB of HBM2e high-bandwidth memory with a bandwidth of 3.7TB per second, PCIe 5.0X16 interface, and decoding standards.

However, due to US export restrictions on AI chips, the comprehensive computing performance (TPP) of high-performance AI needs to be below 4,800 to export to China. This means the Chinese special edition’s 16-bit performance cannot exceed 150 TFLOPS (trillion floating-point operations per second).

For comparison, the original Gaudi 3 achieves 1,835 TFLOPS in FP16/BF16. This contrasts with NVIDIA’s H100, which is approximately 40% faster in large model training and 50% more efficient in inference tasks.

Therefore, the made-for-China edition will need to significantly reduce the number of cores (the original version has 8 Matrix Multiplication Engines [MME] and 64 Tensor Processor Core [TPC] engines) and operating frequency. Ultimately, this could result in reducing its AI performance by approximately 92% to comply with US export control requirements.

Analyses cited in the same report further suggest that Intel’s launch of the made-for-China edition for AI performance will be comparable to NVIDIA’s AI accelerator card H20 tailored for the Chinese market.

The made-for-China edition of Intel’s Gaudi 3 boasts a performance of 148 TFLOPS in FP16/BF16, slightly below the 150 TFLOPS limit. However, in terms of high-bandwidth memory (HBM) capacity and bandwidth, the Chinese special edition Gaudi 3 will be lower than NVIDIA’s H20, potentially putting it at a competitive disadvantage against the H20. Still, pricing will also be a key factor in determining whether it holds any competitive advantage.

As per a previous report from Reuters, the prices of the chips were said to be comparable to those of its competitor Huawei’s products. Reportedly, NVIDIA priced orders from Chinese H20 distributors between USD 12,000 and 15,000 per unit.

TrendForce believes Chinese companies will continue to buy existing AI chips in the short term. NVIDIA’s GPU AI accelerator chips remain a top priority—including H20, L20, and L2—designed specifically for the Chinese market following the ban.

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(Photo credit: NVIDIA)