Intel Doubles Down on AI with $2 Billion Habana Acquisition

Intel acquired Israel-based AI chip manufacturer Habana Labs for about $2 billion, to strengthen its offerings for data centers requiring such chips. The tech giant already stated that it expects to complete more than $3.5 billion in sales related to artificial intelligence, an increase of 20 percent from last year. The Habana purchase is just one of several that Intel has made in recent years in its efforts to grow new markets. Intel expects the AI chip market to grow to $25 billion by 2024, half from selling chips for data centers.

The Wall Street Journal reports that Intel chief executive Bob Swan “has made AI one of the company’s investment priorities.” The company’s recent purchases include Israeli vehicle camera firm Mobileye for $1.53 billion in 2017; startup Nervana Systems for about $400 million in 2016, followed by Movidius, an Irish startup in “another bet on AI growth.”

Intel general manager of the Intel division for data centers and AI Navin Shenoy noted how Habana “fits into Intel’s broader strategy of going after large new computing markets instead of simply maintaining its dominant share of the market for computers’ main processing chips.” “We have a relatively small share in a large, growing market, so our intent is to go after that,” he said.

Intel is “playing catch-up to rival Nvidia, whose graphics chips were better than Intel’s standard processors at handling the calculations needed in AI.” Deep learning, which is “in growing use,” also requires “large amount of computing horsepower to sift through masses of data to spot trends.”

Intel stated Habana will remain “an independent business unit” located in Israel and led by current management. It will “report to Intel’s Data Platforms Group, home to Intel’s portfolio of data center class AI technologies.”

Although venture capitalists have “largely shied away from chip investments because of the high development costs,” they too are beginning to invest in the sector. Intel is not alone in making investments in AI.

Apple, for example, has “made a series of acquisitions, mostly of startups for undisclosed amounts, of companies specializing in areas such as facial recognition, AI for home security and self-driving cars.” Google has also “been on an AI acquisition spree, acquiring an AI-focused customer-service company, a computer vision company and the prominent British AI firm DeepMind, among other deals.”