Whatever Happened To Intel's Gaudi 3? August 24, 2025

From Google AI:

Intel's Gaudi 3 AI accelerator is now on the market, available through cloud services and server partners

. However, the product has underperformed Intel's revenue expectations and faces significant challenges competing with Nvidia's dominant market position and superior software ecosystem. 

Here is a summary of the current status of Gaudi 3:

Market performance and competition

• Missed revenue targets: In November 2024, Intel admitted its Gaudi processors would miss its revenue targets, which CEO Pat Gelsinger attributed to a slower-than-anticipated uptake. This came despite offering a lower cost per-chip than Nvidia.
• Lags behind competitors: While positioned as a direct competitor to Nvidia's H100, Gaudi 3 is not seen as comparable to Nvidia's latest technology, such as the Blackwell platform.
• Software challenges: Unlike Nvidia's mature CUDA platform, Gaudi relies on an open-source software stack that has been slower to develop and adopt, hindering its usability for some customers.
• Targeting niche customers: Instead of a direct head-to-head with Nvidia, Intel appears to be targeting enterprises that need cheaper AI solutions for specific, smaller models and open-source options.

Availability and partnerships

• Cloud deployment: Gaudi 3 is currently offered as a cloud service on IBM Cloud. Customers can use it to provision stand-alone virtual servers or as a containerized worker node for Red Hat OpenShift AI clusters.
• Rack scale systems: Gaudi 3 is also available in scalable rack systems that support up to 64 accelerators. Dell is offering Gaudi 3 in its PowerEdge XE9680 servers.
• Enterprise adoption: Despite market challenges, some high-profile clients have adopted the technology, including Inflection AI (for its enterprise-focused platform) and IBM.

Future outlook

• Limited shelf life: The Gaudi line of accelerators is reportedly being phased out in favor of Intel's next-generation GPU, codenamed Falcon Shores.
• Cancelled flagship product: In February 2025, Intel cancelled its commercial plans for the Falcon Shores product. The technology will now be used as an internal test chip as Intel shifts its focus to developing broader, rack-level AI solutions centered around its Jaguar Shores project. This decision marks a scaling back of Intel's ambitions to become a major supplier of discrete AI accelerator chips.

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