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Business financial make money capital trading Intel explains its strategy for standing out in edge computing, the next $65 billion battleground in the processor market — and why it’s not worried about Nvidia’s $40 billion Arm purchase (INTC, NVDA)


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Business financial make money capital trading Intel explains its strategy for standing out in edge computing, the next $65 billion battleground in the processor market — and why it’s not worried about Nvidia’s $40 billion Arm purchase (INTC, NVDA)

Mustafa Ciftci/Anadolu Agency/Getty Images This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. Edge computing — the concept of running advanced AI on the device, rather than in the cloud — is the technological foundation behind many of the most significant advancements in recent memory, from self-driving cars…

Business  financial  make money  capital  trading Intel explains its strategy for standing out in edge computing, the next $65 billion battleground in the processor market — and why it’s not worried about Nvidia’s $40 billion Arm purchase (INTC, NVDA)

Business financial make money capital trading

business  financial  make money  capital  trading GettyImages 1187294942business  financial  make money  capital  trading GettyImages 1187294942



Mustafa Ciftci/Anadolu Agency/Getty Images


This story is available exclusively to Business Insider subscribers.
Become an Insider and start reading now.

  • Edge computing — the concept of running advanced AI on the device, rather than in the cloud — is the technological foundation behind many of the most significant advancements in recent memory, from self-driving cars to manufacturing robots.
  • Intel projects that the market could be worth $65 billion by 2024 — and it’s steadily becoming a bigger chunk of the tech giant’s annual revenue.  
  • Competition among chipmakers is already fierce for dominance in the nascent industry, but “we’re very confident that we’re going to be very successful,” Intel Vice President Dan Rodriquez told Business Insider. 
  • The battle is set to get more heated after Nvidia announced it would purchase British chip design company Arm Holdings, giving the company a potential advantage in the market for edge computing. 
  • Visit Business Insider’s homepage for more stories.

Edge computing — which is to say, the concept of running advanced AI on a device, rather than from the cloud — is the underpinning behind many of the most-anticipated technological advancements coming down the pipeline.

Take a self-driving vehicle, as a major example. An autonomous car has to be able to respond to unexpected events on the road, like a child running across the street, in milliseconds. That’s not nearly enough time to be able to rely on the car to communicate with an AI system hosted in a cloud like Amazon’s or Microsoft’s and get a response. By placing the emphasis on the car’s own processor, however, the vehicle can be relied on to make decisions instantly. 

While the battle over supremacy in the edge computing sector isn’t as well-known or contentious as the cloud wars, juggernauts like Amazon, SAP, and Oracle are all vying with each other and a slew of startups for an early leadership position in what experts predict could be a $65 billion billion market by 2024.

But one segment — the race to develop the chips to support edge computing — is quickly heating up.

At Intel, edge computing is becoming an important piece of the tech giant’s business, even as the company is roiled by executive turnover and delays to its next generation of PC processors.

In 2019, Intel says its edge computing unit generated $10 billion in revenue, a significant chunk of its $72 billion in total annual revenue. The company declined to elaborate on how much of an increase that was from prior years. And Intel is bullish on expanding its customer base, which already includes corporations like Audi, CenturyLink, and Rakuten Mobile

“This is just about helping our partners do business in a more simple and effective way using all sorts of digital technology,” Intel Vice President Dan Rodriquez told Business Insider. 

business  financial  make money  capital  trading Dan_Rodriguez_01_web

Dan Rodriquez is a vice president at Intel.

Intel


But Intel’s ambitions were dealt a blow with graphics processor specialist Nvidia’s impending $40 billion acquisition of SoftBank-owned Arm Holdings— all part of a strategy by CEO Jensen Huang to double down on edge computing

Nvidia already makes the graphics chips that have become critical in the push to artificial intelligence. Arm, for its part, provides the design that underpin most smartphones — and, increasingly, servers in data centers around the world. 

By purchasing Arm, according to analysts, Nvidia can combine its GPU prowess with Arm’s CPUs to create a powerful system designed for both high-performance computing tasks like AI, as well as basic processing.

Read more: Arm’s cofounder claims the chip designer’s licensees are ‘not happy’ about its $40 billion sale to Nvidia

The rivalry is looking to get even more intense after Nvidia surpassed Intel earlier this year as the most valuable chip maker in the US. Despite the looming threat, Intel’s strategy remains steady, according to Tom Lantzsch, senior vice president and manager of the “Internet of Things” group.  

“I don’t think it changes anything for us,” he said. “If anything, it maybe pushes us to go faster, but competition always does that.”

Business financial make money capital trading ‘We have a very wide scale’ 

One reason why Intel is so bullish it can lead in the burgeoning edge computing industry is because it already has 15,000 customer deployments under its belt among 1,200 customers. 

“We have a very wide scale,” said Rodriquez. “With the capabilities that we’re investing in, plus our ecosystem and all of our partners, we’re very confident that we’re going to be very successful.” 

Audi, for example, is using Intel’s tech to improve quality control in its manufacturing process. Prior to adopting more sophisticated machine learning capabilities, each of 5,000 welds included in every one of the 1,000 vehicles assembled every day at one facility would need to be inspected by hand — an impossible task given that amounts to 5 million welds that would need examination every day. 

Now, after the German carmaker tapped a predictive quality control system from Intel powered by edge computing technologies, the amount of weld inspections possible in a day increased by over 100-fold and labor costs were cut by as much as 50%.

business  financial  make money  capital  trading tom lantzsch

Tom Lantzsch is the senior vice president and manager of Intel’s “Internet of Things” group.

Intel


“If customers plan to have this kind of capability and add this kind of capability that we can demonstrate with these solutions, we can demonstrate to them immediately the business impact,” Lantzsch said. 

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