Intel will enter GPU manufacturing, challenging Nvidia's market dominance

At the Cisco AI Summit on Tuesday, Intel CEO Lip-Bu Tan announced that the company will start producing graphics processing units (GPUs), a move that marks a significant expansion into the specialized processor market. These GPUs are more specialized processors compared to the CPUs Intel traditionally produces, and are used for gaming and tasks like training artificial intelligence models.

The project will be overseen by Kevork Kechichian, the executive vice president and general manager of Intel's data center group, who was hired in September among a slew of new engineer-focused hires. Intel also hired Eric Demers for the effort in January, who was previously at Qualcomm for more than 13 years, most recently serving as a senior vice president of engineering.

The initiative appears to be in relatively early stages, with Tan indicating that the company plans to develop its strategy around customer demands and needs. While Nvidia didn't invent the GPU, that specific kind of chip has played a large role in its success, and its GPUs for AI systems are so advanced and popular that the chipmaker currently holds a commanding market lead.

This expansion represents a notable strategic shift, as Tan previously stated that the company would be consolidating and focusing on its core businesses when he took the helm as CEO last March. While GPUs are still semiconductors, this GPU initiative marks a departure from that consolidation focus.