#alternate alternate alternate Intel, While Pivoting to Artificial Intelligence, Tries to Protect Lead NYTimes.com no longer supports Internet Explorer 9 or earlier. Please upgrade your browser. LEARN MORE » (Submit) Sections (Submit) Home (Submit) Search Skip to content Skip to navigation View mobile version The New York Times Technology|Intel, While Pivoting to Artificial Intelligence, Tries to Protect Lead (Submit) Search (Submit) Subscribe Now (Submit) Log In (Submit) 0 (Submit) Settings (BUTTON) Close search Site Search Navigation Search NYTimes.com ____________________ (BUTTON) Clear this text input (Submit) Go https://nyti.ms/2u2fhra 1. Loading... See next articles See previous articles Site Navigation Site Mobile Navigation Advertisement Supported by Technology Intel, While Pivoting to Artificial Intelligence, Tries to Protect Lead By STEVE LOHRJULY 10, 2017 Continue reading the main story Share This Page Continue reading the main story Photo A Google data center in Oklahoma. Intel has long dominated the business for central processing chips that control the servers in such centers. Credit Google The computers in modern data centers — the engine rooms of the digital economy — are powered mainly by Intel chips. They animate the computing clouds of the internet giants and corporate data centers worldwide. But Intel is now facing new competitive forces that could pose a challenge to its data-center dominance and profitability. In particular, the rise of artificial intelligence is creating demand for new computing hardware tailored to handle vast amounts of unruly data and complex machine-learning software — and Intel’s general-purpose chips are not yet tuned for the most demanding tasks. Instead, specialized chips are delivering better performance on artificial intelligence programs that identify images, recognize speech and translate languages. Intel is hurrying to catch the A.I. wave. On Tuesday, to deal with the changing competitive landscape, the Silicon Valley giant is presenting its newest data-center strategy at an event in New York, addressing its A.I. plans and its mainstream data-center business. The company has billed the event as its “biggest data-center launch in a decade.” Advertisement Continue reading the main story How successful Intel’s efforts prove to be will be crucial not only for the company but also for the long-term future of the computer chip industry. Continue reading the main story Advertisement Continue reading the main story “We’re seeing a lot more competition in the data-center market than we’ve seen in a long time,” said Linley Gwennap, a semiconductor expert who leads a technology research firm in Mountain View, Calif. Intel has long dominated the business for central processing chips that control industry-standard servers in data centers. Matthew Eastwood, an analyst at IDC, said the company controlled about 96 percent of such chips. But others are making inroads into advanced data centers. Nvidia, a chip maker in Santa Clara, Calif., does not make Intel-style central processors. But its graphics-processing chips, used by gamers in turbocharged personal computers, have proved well suited for A.I. tasks. Nvidia’s data-center business is taking off, with the company’s sales surging and its stock price nearly tripling in the last year. Big Intel customers like Google, Microsoft and Amazon are also working on chip designs. AMD and ARM, which make central processing chips like Intel, are edging into the data-center market, too. IBM made its Power chip technology open source a few years ago, and Google and others are designing prototypes. To counter some of these trends, Intel is expected on Tuesday to provide details about the performance and uses of its new chips and its plans for the future. The company is set to formally introduce the next generation of its Xeon data-center microprocessors, code-named Skylake. And there will be a range of Xeon offerings with different numbers of processing cores, speeds, amounts of attached memory, and prices. Yet analysts said that would represent progress along Intel’s current path rather than an embrace of new models of computing. Stacy Rasgon, a semiconductor analyst at Bernstein Research, said, “They’re late to artificial intelligence.” Photo Chips made by Nvidia, a rival of Intel. Nvidia’s sales have been surging, and its stock price has nearly tripled in the last year. Credit Tyrone Siu/Reuters Intel disputes that characterization, saying that artificial intelligence is an emerging technology in which the company is making major investments. In a blog post last fall, Brian Krzanich, Intel’s chief executive, wrote that it was “uniquely capable of enabling and accelerating the promise of A.I.” Advertisement Continue reading the main story Intel has been working in several ways to respond to the competition in data-center chips. The company acquired Nervana Systems, an artificial intelligence start-up, for more than $400 million last year. In March, Intel created an A.I. group, headed by Naveen G. Rao, a founder and former chief executive of Nervana. The Nervana technology, Intel has said, is being folded into its product road map. A chip code-named Lake Crest is being tested and will be available to some customers this year. Newsletter Sign Up Continue reading the main story Please verify you're not a robot by clicking the box. Invalid email address. Please re-enter. You must select a newsletter to subscribe to. ____________________ (Submit) Sign Up [_] You agree to receive occasional updates and special offers for The New York Times's products and services. Thank you for subscribing. An error has occurred. Please try again later. You are already subscribed to this email. View all New York Times newsletters. * See Sample * Manage Email Preferences * Not you? * Privacy Policy * Opt out or contact us anytime Lake Crest is tailored for A.I. programs called neural networks, which learn specific tasks by analyzing huge amounts of data. Feed millions of cat photos into a neural network and it can learn to recognize a cat — and later pick out cats by color and breed. The principle is the same for speech recognition and language translation. Intel has also said it is working to integrate Nervana technology into a future Xeon processor, code-named Knight’s Crest. Intel’s challenge, analysts said, is a classic one of adapting an extraordinarily successful business to a fundamental shift in the marketplace. As the dominant data-center chip maker, used by a wide array of customers with different needs, Intel has loaded more capabilities into its central processors. It has been an immensely profitable strategy: Intel had net income of $10.3 billion last year on revenue of $59.4 billion. Yet key customers increasingly want computing designs that parcel out work to a collection of specialized chips rather than have that work flow through the central processor. A central processor can be thought of as part brain, doing the logic processing, and part traffic cop, orchestrating the flow of data through the computer. The outlying, specialized chips are known in the industry as accelerators. They can do certain things, like data-driven A.I. tasks, faster than a central processor. Accelerators include graphics processors, application-specific integrated circuits (ASICs) and field-programmable gate arrays (F.P.G.A.s). Advertisement Continue reading the main story A more diverse set of chips does not mean the need for Intel’s central processor disappears. The processor just does less of the work, becoming more of a traffic cop and less of a brain. If this happens, Intel’s business becomes less profitable. Intel is not standing still. In 2015, it paid $16.7 billion for Altera, a maker of field-programmable gate arrays, which make chips more flexible because they can be repeatedly reprogrammed with software. Mr. Gwennap, the independent analyst, said, “Intel has a very good read on data centers and what those customers want.” Still, the question remains whether knowing what the customers want translates into giving them what they want, if that path presents a threat to Intel’s business model and profit margins. Follow Steve Lohr on Twitter @SteveLohr. A version of this article appears in print on July 11, 2017, on Page B5 of the New York edition with the headline: Intel Protects Its Lead While Pivoting to A.I. Order Reprints| Today's Paper|Subscribe Continue reading the main story We’re interested in your feedback on this page. Tell us what you think. Related Coverage * Intel Buys Mobileye in $15.3 Billion Bid to Lead Self-Driving Car Market MARCH 13, 2017 * Intel Earnings Surpass Forecasts, Driven by Data Centers JULY 15, 2015 * Intel Agrees to Buy Altera for $16.7 Billion JUNE 1, 2015 * * * * Related Coverage 1. Intel Buys Mobileye in $15.3 Billion Bid to Lead Self-Driving Car Market MARCH 13, 2017 2. Intel Earnings Surpass Forecasts, Driven by Data Centers JULY 15, 2015 3. Intel Agrees to Buy Altera for $16.7 Billion JUNE 1, 2015 What's Next Loading... 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