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Intel snaps up AI chip specialist Habana Labs for £1.5bn

Intel has snapped up deep learning chip specialist Habana Labs in a $2bn (£1.5bn) bid to capitalise on the rising demand for AI processors.

The tech giant predicts that the market for such chips will grow to more than $25bn (£18.8bn) by 2024, driven largely by their use in data centres.

Habana Labs, which was founded just three years ago, has produced a “Gaudi” AI training processor that is currently being tested by a number of “hyperscale customers”, Intel said.

The US firm, which intends to offset slowing demand for PC chips by expanding its data centre business, claims that it will generate $3.5bn (£2.6bn) in AI revenue this year.

According to unofficial estimates published in June, Intel’s data centre division now accounts for 40 per cent of the company’s value. It expects that the market for AI chips in data centres will exceed $10bn (£7.5bn) by 2024.

Navin Shenoy, general manager of Intel’s data platforms group, said the acquisition would advance the company’s AI strategy: “We know that customers are looking for ease of programmability with purpose-built AI solutions, as well as superior, scalable performance on a wide variety of workloads and neural network topologies. That’s why we’re thrilled to have an AI team of Habana’s caliber with a proven track record of execution joining Intel.”

Habana chief executive David Dahan added: “We have been fortunate to get to know and collaborate with Intel given its investment in Habana, and we’re thrilled to be officially joining the team.”

Habana’s existing management team is set to remain in place and the company will continue to operate as a separate unit.