How Nvidia Let Intel Get an Edge in AI Chip Market

It’s the story of a missed opportunity: how Nvidia let a deep learning tech startup get away and be snapped up by its rival Intel. With its $408 million acquisition of Nervana Systems, Intel can now enter a segment of the computer chip market that could fuel a boom in artificial intelligence applications.

Nvidia’s rejection of Nervana may have broader implications for the development of deep learning technology, which is now used for things like speech and image recognition, and for steering in self-driving cars. Nervana is working on a hardware chip that it claims will be faster and more power-efficient than Nvidia’s chips. This could reduce the time it takes companies to develop deep learning applications and scale them to larger numbers of users.

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Intel has made other acquisitions in the area. It spent $16.7 billion last year to acquire Altera, which makes a chip—known as a field programmable general array—which can be reprogrammed for different tasks, including deep learning. Intel also has a line of general-purpose chips called Xeon Phi that it pitches as suitable for deep learning. Last week, Intel acquired Irish chipmaker Movidius, which develops technology that lets computers recognize objects and is used in robots and drones, staking a claim in an emerging segment of deep learning.

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"The savings might not be experienced directly by the users running apps, but will be seen by the companies hosting the server facilities where deep learning algorithms are being run."