Soon after Intel spent $400 million to buy Nervana, a startup building artificial intelligence hardware and software, Nervana CEO Naveen Rao had a run-in with his new colleagues. Executives of Intel’s data center group balked at the idea of selling Nervana’s specialized AI chip for servers, Mr. Rao said in an interview. Instead, the group thought Intel should continue selling its traditional line of chips called Xeons for the giant machines powering data centers.
“There were lots of disagreements between folks on what the direction should be,” said Mr. Rao in an interview with The Information. He ended up winning the battle. A little later, Mr. Rao was elevated to run a new Artificial Intelligence Products Group, reporting directly to CEO Brian Krzanich, and the company is now embracing specialized AI chips.