AnalysisIntel has sights on Nvidia with new GenAI spinoff
Analysis
Intel has sights on Nvidia with new GenAI spinoff
The new company, Articul8, is being established in collaboration with the digital-focused asset manager DigitalBridge. Intel hopes that the move will help improve its position in the hottest market in tech, where it is lagging behind Nvidia - the first chip company to reach a trillion dollar valuation
Intel is spinning off its AI software development activity into a new independent company that will develop and provide generative artificial intelligence (GenAI) solutions for businesses - the chip giant announced on Wednesday. The company hopes that the move will help improve its position in the hottest market in tech, where it is lagging behind Nvidia, whose AI chips were one of the most sought-after products in the industry in 2023 and made it the first chip company to be valued at more than a trillion dollars.
The new company, Articul8, is established with backing from digital-focused asset manager DigitalBridge Group and other investors. Its activities will be based on intellectual property and technologies developed at Intel, and the two companies will be "strategically coordinated" in moves such as product launches and cooperate in promoting the adoption of GenAI in the industry.
Arun Subramaniyan, who was formerly vice president and general manager in Intel’s data center and AI group, will become chief executive of Articul8. "We've been really trying to address the biggest gap in generative AI today, which is that building a proof of concept is easy, but getting things into production and doing it safely and in a cost sustainable way is really what is missing," Subramaniyan said in an interview.
DigitalBridge's venture capital arm is the lead investor in the new company, alongside Intel and a syndicate of venture capital funds that includes Fin Capital, Mindset Ventures, Communitas Capital, GiantLeap Capital, GS Futures and Zain Group.
Intel did not specify the amount of shares it will have in the new company, or the value of the deal.
Intel hopes that the new company will accelerate the adoption of GenAI solutions in the industry, while providing an answer to some of the most prominent issues related to the use of this technology in business, such as keeping customer and business information within the company's information security perimeter. "With its deep AI and HPC domain knowledge and enterprise-grade GenAI deployments, Articul8 is well positioned to deliver tangible business outcomes for Intel and our broader ecosystem of customers and partners. As Intel accelerates AI everywhere, we look forward to our continued collaboration with Articul8," Intel CEO Pat Gelsinger said in a press release.
DigitalBridge CEO Marc Ganzi added: "Every global enterprise today is challenged to integrate GenAI capabilities into their workflows. Articul8 has built a scalable and easy-to-deploy GenAI software platform that is already enabling enterprises to unlock value from their proprietary data. We see GenAI as a pivotal force driving digital infrastructure, and we are pleased to collaborate with Intel to support Articul8’s growth."
