Intel acquires AI chip startup Habana Labs for $2 billion

Intel plans to acquire Habana, an AI chip startup, for $1-2 billion.
Image: Cody DeBos / The Burn-In

Earlier this month, The Burn-In reported that Intel showed interest in purchasing Habana Labs, an AI chipmaker. Today, the tech giant announced that it has finally acquired the startup. The deal is worth about $2 billion according to an Intel press release.

The acquisition should be beneficial for both sides. Habana Labs will continue to operate independently while Intel seeks to strengthen its position in the AI chip market. It currently projects that sector to continue growing deep into the 2020s as artificial intelligence (AI) technology needs more powerful computing hardware.

Inevitable Deal

When news broke at the start of December that Intel wanted to acquire Habana, the deal was all but done. Since then, both sides have worked to hash out an agreement that is mutually beneficial.

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Intel’s latest acquisition isn’t exactly surprising. Throughout the course of 2019, the chipmaker has also purchased other AI startups including Nervana Systems and Movidius. By adding Habana, and its ultra-powerful Gaudi AI processor, Intel is putting itself firmly at the top of the growing AI chip market.

For the company and its shareholders, that is a good thing. Intel currently estimates that the AI silicon market will be worth more than $25 billion by 2024. This year, Intel projects that it will generate $3.5 billion in AI-related revenue. That figure marks a more than 20 percent increase year-over-year compared to 2018.

Navin Shenoy, executive VP and general manager of the Data Platforms Group at Intel says, “This acquisition advances our AI strategy, which is to provide customers with solutions to fit every performance need—from the intelligent edge to the data center.”

He goes on to add, “Habana turbo-charges our AI offerings for the data center with a high-performance training processor family and a standards-based programming environment to address evolving AI workloads.”

About Habana Labs

Intel isn’t the only one planning to profit from the booming AI chip market. Habana Labs, an Israeli-based startup, also has intentions of cashing in. The deal will allow the chipmaker to remain independent of Intel while helping fuel its growth. Habana will gain access to Intel’s AI capabilities, algorithms, and research to help scale its business.

Founded in 2016, it didn’t take long for Habana to start making waves with its tech. The startup’s flagship product is the Gaudi AI training chip, which is capable of handling 2 Tbps of throughput thanks to 10 100 Gbps Ethernet ports. With that kind of power, Gaudi can sort through more than 1,650 images per second. Compared to other AI hardware on the market, Habana’s chip is unrivaled.

The startup’s CEO, David Dahan, said, “Intel has created a world-class AI team and capability. We are excited to partner with Intel to accelerate and scale our business. Together, we will deliver our customers more AI innovation, faster.”

As of now, the deal between the two companies is complete. It will need to gain approval prior to becoming official, but it doesn’t appear that any roadblocks stand in the way. With the power of Habana Labs now in its portfolio, Intel will look to continue pursing the AI chip industry as we roll into a new decade.


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