Why Intel Launched New Xeon Chips
Intel launches new generation of microprocessor chips
On Tuesday, July 11, 2017, Intel (INTC) launched a new generation of microprocessor chips from the Xeon Scalable family for corporate servers and cloud data centers. The new processors will cost anywhere between $200 and $10,000.
The chipmaker said its new chips are 65.0% faster on average compared to its previous generation. However, analysts tend to reserve their verdict about performance until independent test results are available.
Intel has sold about half a million of its new Xeon chips to customers such as Google’s parent company Alphabet (GOOG). It also permitted some companies to test the performance of the chips.
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Why Intel is launching new Xeon chips
The chip sector enjoys very high profitability. Intel’s server chip division saw an operating profit of 44.0% in fiscal 2016. Its competitor Advanced Micro Devices (AMD) recently challenged Intel by launching a new generation of high-performance processors. AMD’s Epyc server chips are priced at half of Intel’s chips.
Intel is second to Nvidia (NVDA) when it comes to the AI (artificial intelligence) space. Nvidia, the pioneer in the deep learning training space, recently entered into a deal with Volkswagen (VLKAY). However, Intel’s Xeon chip can also run some basic AI tasks. Intel acquired AI chip startup Nervana Systems last year.