---
title: "Intel Just Gutted Its AI Chip Ambitions"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/226882569.md"
description: "Intel has struggled to capitalize on the growing demand for AI accelerators, missing its $500 million sales target for its Gaudi chips. The company is scrapping its Falcon Shores GPU project and shifting focus to broader AI solutions with Jaguar Shores, expected in 2026. This marks a significant pivot away from standalone AI chips, as Intel aims to integrate its technologies into comprehensive data center solutions. Despite past potential, Intel's efforts in the AI accelerator market have faltered, necessitating reliance on its foundry business and upcoming CPUs for future success."
datetime: "2025-02-02T13:32:09.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/226882569.md)
  - [en](https://longbridge.com/en/news/226882569.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/226882569.md)
---

> Supported Languages: [简体中文](https://longbridge.com/zh-CN/news/226882569.md) | [繁體中文](https://longbridge.com/zh-HK/news/226882569.md)


# Intel Just Gutted Its AI Chip Ambitions

**Intel** (INTC -2.90%) has largely failed to tap into soaring demand for artificial intelligence (AI) accelerators. The company's acquisition of AI chip start-up Habana Labs back in 2019, three years before the AI boom kicked off in earnest, certainly seemed like a prescient move. Habana's Gaudi family of AI accelerators, which were tailor-made for AI workloads compared to more general-purpose GPUs, had all the makings of a big winner.

Intel is now on the third generation of its Gaudi AI chips, and progress has been excruciatingly slow. The company set a goal of selling $500 million worth of AI accelerators last year, a target that it ended up missing. Meanwhile, **Nvidia** is churning up tens of billions of dollars in AI chip revenue each quarter, and **AMD** has guided for about $5 billion in AI chip sales for 2024.

One big problem for Intel has been software. Gaudi is not a GPU, so the architecture is very different from the AI accelerators that currently dominate the market. Despite aggressive pricing from Intel, an immature software ecosystem has been holding Gaudi back. Intel has had some wins, including a deal with **IBM** to put Gaudi 3 chips in IBM's cloud data centers. Unfortunately for Intel, these wins just haven't been big enough to really move the needle.

## Shaking up the roadmap

Intel's AI accelerator roadmap has been a bit scattered for quite a while. Until last week, the plan was to launch Falcon Shores in late 2025. Falcon Shores is a more traditional GPU that was expected to incorporate some features from the Gaudi family of chips. The planned end of the Gaudi chip family and the switch to an entirely new architecture may have been factors that kept potential Gaudi customers away.

During its fourth-quarter earnings call on Thursday, Intel disclosed that Falcon Shores was being scrapped as a commercial product. The new plan is to use Falcon Shores as an internal test chip as the company focuses on rack-level AI solutions built around Jaguar Shores, which was supposed to be Falcon Shores' successor.

This effectively marks the end of Intel's efforts to become a major supplier of AI accelerator chips. Instead, the company is pivoting to broader AI solutions for data centers. Jaguar Shores can be paired with the company's Xeon server CPUs and other Intel technologies, a strategy that certainly makes sense, given the difficulties Intel has had selling its Gaudi chips.

"Falcon Shores will help us in that process of working on the system, networking memory, all the component functions of that, but what customers really want is that full-scale rack solution. And so, we're able to get to that with Jaguar Shores," said Intel interim co-CEO Michelle Holthaus.

## No AI comeback in 2025

Jaguar Shores isn't expected to launch until sometime in 2026, and Intel's shift away from focusing on stand-alone AI accelerators may further depress interest in the company's Gaudi family of chips. 2024 was a disappointing year for Intel's AI business, and 2025 isn't looking much better.

In the long run, Intel's new focus on AI systems rather than AI chips might be the best way for the company to finally break into the data center AI market. Gaudi certainly had potential, but the company bungled its opportunity to become a major player in the AI accelerator market.

Intel can still turn itself around, but AI chips won't be a factor. Instead, the company will need to rely on its foundry business and its upcoming PC and server CPUs to carry it to the finish line.

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