Intel (INTC) Spruces Up AI Capabilities to Challenge AMD & NVDA

Intel INTC has reportedly acquired Cnvrg.io — an Israel-based company that specializes in development of advanced machine learning (ML) models.

The TechCrunch article, citing confirmation from an Intel’s spokesperson, states that the startup will function as “an independent Intel company.”

However, neither has there been an official statement regarding the development, nor the terms of the deal have been revealed. Nevertheless, per Pitchbook data, Cnvrg.io has raised funds worth $8 million and was valued at $17.8 million.

The chipmaker has remained focused on accelerating its presence in the fast-growing AI silicon market and bringing AI technology down to the chip level. The company upholds the notion that a broad mix of technology is essential for harnessing the power of ML and AI.

In fact, the semiconductor giant sealed SigOpt acquisition deal in the past week. Notably, San Francisco, CA-based SigOpt offers an optimization platform to aid data scientists run AI-driven modeling and simulations workloads in an enhanced manner.

Strategic Bets to Enhance AI Expertise Hold Promise

Rapid proliferation of AI into hardware system calls for effective solutions to support processing of workloads. According to IDC data, worldwide spending on AI systems is projected to be $50.1 billion in 2020. The research firm expects the figure to hit $110 billion in 2024 at a CAGR of 20.1% between 2019 and 2024.

This growth opportunity is alluring Intel and other semiconductor companies to deliver efficient solutions aimed at supporting complex AI workloads and enhance performance.

Intel is leaving no stone unturned to ramp up its efforts in the AI trained inference server chip market. The company’s latest acquisitions follow a string of AI-related buyouts undertaken in the past few years that include — Habana, Movidius, Nervana, Altera and Mobileye.

These buyouts are expected to aid Intel in bolstering its portfolio of AI accelerators in its data center business, taking the fight to NVIDIA NVDA and Advanced Micro Devices AMD.

NVIDIA’s Arm Acquisition & AMD’s Xilinx Deal to Spice Up the Game

Both NVIDIA and AMD are doubling down on end-to-end stack development to enhance presence in the data center end-market.

NVIDIA’s impending acquisition of Arm Holdings for $40 billion holds potential to guide the chip industry to new highs and deserves a special mention in this regard. To quote NVIDIA’s CEO, Jensen Huang's views on the deal, “We’re uniting NVIDIA’s leading AI computing with Arm’s vast ecosystem.”

NVIDIA Corporation Revenue (Quarterly)

NVIDIA Corporation revenue-quarterly | NVIDIA Corporation Quote

Continuing momentum of Arm-based devices coming to the market and synergies from NVIDIA’s AI expertise are likely to intensify competition in the mobile segment, which is a headwind for Intel. NVIDIA currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Meanwhile, AMD is benefiting from solid uptake of Ryzen and EPYC server processors, courtesy of increasing proliferation of AI and ML in industries like cloud gaming and supercomputing domain. In a bid to capitalize on these gains, it has entered into a definitive agreement to acquire Xilinx XLNX for $35 billion in an all-stock transaction.

Advanced Micro Devices, Inc. Revenue (Quarterly)

Advanced Micro Devices, Inc. revenue-quarterly | Advanced Micro Devices, Inc. Quote

Buyout of Xilinx, the pioneer in field-programmable gate arrays (FPGAs) chips, will boost AMD's data center business, which is benefiting from coronavirus crisis triggered cloud computing boom. AMD, currently carrying a Zacks Rank #3 (Hold), expects the acquisition to bolster its total addressable market (or TAM) to $110 billion.

With the competition intensifying in the consolidating chip industry, it becomes imperative for Intel to make strategic investments that help it expand AI capabilities, and increase competitiveness of its processors in the data center vertical.

The buyouts are anticipated to augment Intel’s portfolio by adding AI and ML capabilities to a high-performance training processor family and standards-based programming environment to cater to AI workloads. Intel’s combined expertise is likely to aid it in delivering best in-class AI products to meet diverse performance needs of customers.

This is expected to aid Intel in delivering advanced inference performance with focus on throughput and real-time latency in a highly competitive power envelope. Such upsides are likely to strengthen Intel’s footing in the AI space.

Intel Corporation Revenue (Quarterly)

Intel Corporation revenue-quarterly | Intel Corporation Quote

Markedly, the company expects the AI space to be worth more than $25 billion by 2024, and AI silicon in the data center is projected to hit $10 billion in the same time frame.

In fact, the company has rolled out Neural Network processors to support deep learning processes. Moreover, Intel’s Movidius visual processing unit is expected to accelerate complex computer vision, edge media and inference applications. Also, increasing investments in development of inference-enabled chips are anticipated to boost Intel’s self-driving initiatives and register new deal wins from Mobileye. Intel currently carries a Zacks Rank #3.

These Stocks Are Poised to Soar Past the Pandemic

The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.

Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.

See the 5 high-tech stocks now>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
 
Intel Corporation (INTC) : Free Stock Analysis Report
 
Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
 
Xilinx, Inc. (XLNX) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research