Before Intel's announcement, Nvidia held the major share of the market in AI chips, particularly in the data center GPU market. Now, Intel has entered the competition with its Gaudi 3 AI accelerator that was unveiled on Tuesday.

According to Intel, the new chip is designed to compete with Nvidia and offers significant advantages such as 50% better inference and 40% better power efficiency than Nvidia's H100. Moreover, the cost of Gaudi 3 is much lower than that of the H100, making it more accessible.

Intel has mentioned that the Gaudi 3 will be made available to manufacturers like Dell Technologies, Hewlett Packard Enterprise, Lenovo, and Super Micro Computer. Additionally, Intel revealed new customers and partners like Bharti Airtel, Bosch, IBM, and NielsenIQ.

While the news boosted Intel's stock by 1% on Tuesday, concerns related to the inflation report caused it to drop by 3% on Wednesday. Even though Intel's stock had performed well in 2023 due to hopes of recovery in the semiconductor sector, it has not fared well in 2024, declining by 26% year to date. However, the Gaudi 3 presents Intel with a chance for a comeback.

With Nvidia's data center revenue soaring, Intel's new AI chip could help the company gain a significant share in the market. While Nvidia faces shortages in their AI superchips, Intel could capitalize on this by offering a competitive product. Despite the challenges ahead, the Gaudi 3 has the potential to elevate Intel's position in the AI chip industry.