Report: Intel wants to buy AI chip startup Habana Labs for $1 billion

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On Wednesday, Tom’s Hardware reported that Intel is in talks to buy artificial intelligence (AI) chip startup Habana Labs. Though neither company has confirmed that negotiations are taking place, insiders told the publication that the deal would be worth $1 billion to $2 billion. If the purchase goes through, it will be the chipmaker’s third AI hardware acquisition in as many years.

Habana Labs, Explained

Founded by David Dahan and Ran Halutz in 2016, Habana Labs specializes in high-performance deep learning training and inference components. The startup’s flagship product is Gaudi, which is known for its ability to interconnect with hundreds of other processors. The chipset also features a remote memory direct access engine capable of handling 2 Tbps of throughput via up to 10 100 Gbps Ethernet ports.

Because of its robust build, Gaudi can process 1,650 images per second. Notably, Habana’s product offers a 14 percent higher performance rate than Nvidia’s V100 processor with half the energy consumption.

Since its establishment, the startup has raised $120 million in outside funding. In November 2018, Habana secured $75 million in Series B funding. It is worth noting that Intel’s venture capital group led the round. However, at the time, Habana’s leadership indicated that the two companies had no plans to work together.

Intel’s Increasingly Diverse Portfolio

Although Intel generates the bulk of its income from its data center and personal computer processors, the firm has been looking to diversify in recent years.

In 2016, the Santa Clara, California-based corporation acquired Movidius, an edge computing processor company, for $400 million. Last month, the firm announced that its new subsidiary has developed a high-powered AI chip called Keem Bay. Movidius boasts that its new product can perform 10 trillion operations per second. The manufacturer intends for its new vision processing unit to power a host of Internet of Things (IoT) devices as well as drones.

In the same year that it bought Movidius, Intel also purchased a deep learning chip startup called Nervana Systems. The firm made the $350 million acquisition to optimize the performance of its Xeon and Xeon Phi processors.

The corporation also snapped up switch manufacturer Barefoot Networks for an undisclosed sum in July.

In October, Intel CFO George Davis offered guidance that his firm would beat analyst revenue predictions in the fourth quarter. With its increasingly diverse and high-quality holdings, the corporation should continue that trend well into 2020.