TECHnalysis Research Blog Extra

August 12, 2016
Intel Purchases AI Chip Vendor

By Bob O'Donnell

The quest for influence and control in the burgeoning fields of artificial intelligence, machine learning and deep learning took another turn this past week as semiconductor giant Intel purchased Nervana Systems. Started by some ex-Qualcomm employees, Nervana Systems has been working on a dedicated deep learning accelerator chip, along with software and development tools to enable the creation of software that will run on their unique architecture.

Intel’s purchase of the company reflects their interest in dramatically speeding up their efforts in deep learning, no doubt in part from the near-term competitive threat from nVidia. Longer term, this looks to be a very strategic purchase for Intel as it gives them access to some key IP and expertise around these AI-driven technologies.

Deep learning and convolutional neural networks, in particular, are expected to have an extremely important and long-term impact on overall computing trends, so most major vendors have efforts to increase their relevance and capabilities in these areas. It’s particularly valuable for Intel because the company has the scale and manufacturing expertise to leverage this IP for both standalone chips initially and, eventually, as a core computing block that they could embed into future processors and other chips. This will allow Intel to bring deep learning capabilities to servers in the short term and client devices longer term.

In addition, Intel can manufacture the chips themselves and, if they prove to be popular enough, this could help keep their production lines running closer to capacity, which helps them keep their overall manufacturing costs down.

Of course, it remains to be seen how well Intel can integrate the Nervana Systems personnel and technology into their own. In particular, there are questions about whether or not the Nervana Systems IP can (or should) be implemented alongside x86 IP, but the promise and potential of the deal makes it look very appealing at first glance.

A number of other startups are also working on deep learning accelerators, so there are also questions from a competitive technology basis about how the Nervana Systems IP will stack up longer term. However, given Intel’s financial strength and their desire to continue driving computing platforms in the data center and for client devices, it’s a safe bet to say that Intel will work hard to remain relevant.

Here's a link to the column: https://techpinions.com/unpacked-for-friday-august-12th-2016/46803

Bob O’Donnell is the president and chief analyst of TECHnalysis Research, LLC a market research firm that provides strategic consulting and market research services to the technology industry and professional financial community. You can follow him on Twitter @bobodtech.