Intel and Nvidia have a budding rivalry that will reach a peak at CES
Intel Corp. has long considered itself without peer, ignoring talk of potential rivals as it rules the chip sector as the unquestioned king.
In the past two years, one of those long-ignored smaller chip companies has put forth a strong argument for matching or even surpassing Intel’s relevance to technology and, especially, the future of tech. While Intel has stayed rather quiet about the artificial-intelligence-fueled ascendance of Nvidia Corp., a rivalry seems to be budding between the two longtime Silicon Valley chip companies that could reach an early peak next week on tech’s biggest annual stage.
Nvidia has transformed from a company known for facilitating better graphics in video games to the brains behind many of the machine-learning breakthroughs that have led to the belief that an age of AI is upon us. The company, behind co-founder and Chief Executive Jensen Huang, has conjured a fast-growing server business out of virtually nothing and become a dominant name in self-driving car technology, which has pushed its valuation up sixfold since the end of 2015.
Intel has never really had a reason to fear Nvidia, as the two companies’ products can typically coincide peacefully in servers or gadgets, but it has obviously taken note of Nvidia’s rise to AI prominence. Intel has responded by breaking out its checkbook, acquiring a startup called Nervana for its AI-influenced server-chip knowledge — and putting its leader in charge of the company’s artificial-intelligence products group — and paying a stunning $15.3 billion for Israeli autonomous-driving company Mobileye.
AI in 2018: Waiting for driverless cars to become a reality
Next week, the two companies will have a chance to show off the ways they will combat each other for years to come at the annual CES trade show in Las Vegas. Intel has long been a major player at CES, but after Chief Executive Brian Krzanich’s keynote at the 2016 event — which recycled plenty of material from his keynote at Intel’s developers forum just a few months earlier — Intel abdicated that spot to Nvidia in 2017. Huang controlled the stage in his keynote address, laying out big auto partnerships and new approaches to online gaming, which helped solidify investor support for Nvidia’s efforts.
In 2018, Intel will reclaim its traditional preshow keynote event, after canceling its annual developers conference last year, and Krzanich will take the stage Monday evening. Nvidia, however, has claimed what was once seen as the “Bill Gates Spot” — Huang will hold his own press conference on Sunday night, the same night Microsoft Corp.’s co-founder gave a preshow talk for many years until his farewell in 2008. The talks on back-to-back nights will be a key highlight for a show expected to focus on many products and technologies fueled by their chips: Virtual and augmented reality, autonomous cars and next-generation personal computers.
Intel is under pressure after having missed the boat in mobile and is now facing another challenge in the next big thing — artificial intelligence, which is a major focus in the data center and in the consumer segment of the Internet of Things, where low-powered chips are essential. As of this week, Krzanich has a new issue to deal with, the reports by researchers of a potential security vulnerability in basically all of its chips.
Intel has gotten out ahead of the news and is trying to convince customers and investors that its chips are safe, saying it has already launched patches for the majority of its chips introduced in the last five years. It’s likely that Krzanich will take a few minutes of his keynote at CES to once again address the safety of its microprocessors, but it remains unclear if the issue will truly have no material affect on the company, and Krzanich’s stock sales need to be better addressed as well.
The rivalry between Intel and Nvidia will play out in the product focus of each company at the show. In Intel’s case, Krzanich is expected to really focus on some new efforts in the graphics area to capture more of Nvidia’s core video-gaming market and its efforts in artificial intelligence and machine learning. Intel is expected to launch a new graphics module at CES with multiple chips for high-end laptops and video gaming, sporting an Advanced Micro Devices Inc. AMD, +4.94% graphics chip, a rare effort between the two rivals to thwart Nvidia’s growth.
“We could see the formal introduction of INTC’s i7 module that incorporates an AMD Radeon GPU,” Ruben Roy, an analyst with MKM Partners, wrote in a note this week. The tech blogosphere has reported that Intel apparently accidentally posted details of its forthcoming chip on its Intel India site, but it has since disappeared, fueling speculation that a launch at CES looms.
Krzanich will also probably show or conduct a lot of demos of prototypes or other far-out products to get the audience excited about the future. Roy noted that he hopes Intel will talk about augmented reality and virtual reality, areas that he expects Nvidia to focus on, especially after Intel shut down Project Alloy, its virtual-reality headset initiative, in September. Intel has a lot of other projects in VR, such as its partnerships to live-stream games in VR with both Major League Baseball and the National Baseball Association, and focused on the technology at its sole press conference at the 2017 CES.
“While Nvidia is expected to highlight its emerging AR/VR technologies, we are interested in hearing updates on Intel’s longer-term approach to the AR/VR ecosystem given the company’s recent decision to wind down its headset reference design,” Roy wrote.
For its part, Nvidia will likely show off its self-driving-car forays, such as new partnerships with car companies, as the automotive theme is again likely to be one of the main focuses of CES this year. Last year, Huang wowed CES with new auto partnerships and ambitious predictions that a Level 4 autonomous vehicle — nearly driverless — will be on the market in 2020.
Each CEO faces pressure. Nvidia, as the now-hot company, has to prove to CES attendees (and to investors paying attention) that it is still worth its salt, after its stock soared another 83% in 2017. And Intel, the embattled incumbent, has to show that it still matters, and that it is not missing another boat.
“Intel has to come back into the game now,” said Roger Kay, principal analyst at Endpoint Technologies. “I don’t think that a big company with Intel’s capital structure can afford to miss two markets in a row, they can’t just live on the PC market.”
Let the show begin.