Intel Debuts AI Cloud With Gaudi 3 Chips, Inflection AI Partnership

The semiconductor giant says it is partnering with Inflection AI for a new enterprise AI solution that is available on Intel Tiber AI Cloud and will be available as a server appliance next year.

Intel announced on Monday that it has launched an AI cloud service featuring its new Gaudi 3 accelerator chips, saying that it will help underpin a new enterprise AI solution with hybrid cloud capabilities from generative AI startup Inflection AI.

The service, called Intel Tiber AI Cloud, represents a rebrand and expansion in scope, effective at the beginning of the month, for Intel Tiber Developer Cloud, which debuted roughly a year ago without the Tiber name to give customers and partners early access to new chips such as Gaudi 3 and Xeon 6 for development purposes.

With Intel Tiber AI Cloud, the chipmaker is expanding the service’s purview to production-level cloud instances that can be used for commercial purposes. The kinds of customers Intel is targeting are large AI startups and enterprises. On top of providing Gaudi 3 instances, the service also features instances powered by Gaudi 2 chips, Xeon CPUs, Core Ultra 200V CPUs and Max Series GPUs, according to Intel.

The AI cloud service serves two priorities for Intel: drumming up interest in the “price performance” advantage of Intel’s recently launched Gaudi 3 accelerator chips, and creating new recurring software and services revenue opportunities, which Intel CEO Pat Gelsinger outlined in CRN magazine’s October 2021 cover story.

Intel Tiber AI Cloud is run by Markus Flierl, an Oracle and Sun Microsystems veteran who was previously head of GPU cloud infrastructure at Nvidia before joining Intel in 2022 and taking the title of corporate vice president for Intel Tiber AI Cloud.

While the move puts Intel in competition to some extent with cloud service providers ranging from major players like Amazon Web Services to startups like CoreWeave, Flierl said in an interview with CRN that Intel decided to create a commercial cloud AI offering in response to “the demand that we’re seeing from customers.” He added that the company doesn’t have ambitions in the cloud market beyond AI computing.

“Competition with AWS is not the focus,” he said.

Flierl said that the expanded purview of Intel Tiber AI Cloud also gives the company an extra revenue stream beyond the paying customers who were using the service for development purposes. Plus, it gives Intel a better way of building relationships with customers.

“If I just give a bunch of free lunches to people, that's easy, but do people like the lunch or not? So adding the commercial aspect helps guide us in terms of what do customers care about, what's important to them. It really elevates that discussion,” he said.

Intel Tiber AI Cloud lets the chipmaker work more directly with customers than it normally would since the company typically relies on partners to bring its chips to the market in various ways, from PCs and servers to cloud services, according to Flierl.

“That’s super valuable for us,” he said.

With data centers in Oregon, Arizona and Ohio, Intel Tiber AI Cloud is viewed as a “huge opportunity” by Flierl, who said “there’s a lot of demand” for such solutions.

When asked if Intel plans to sell Intel Tiber AI Cloud through channel partners, Flierl said the company is looking at working with other independent software vendors and customers to offer solutions like Inflection AI’s new product.

Intel Partners With Inflection AI On Enterprise AI Solution

In tandem with the Intel Tiber AI Cloud announcement, the semiconductor giant said it is partnering with Inflection AI for a new enterprise AI solution that is available on its cloud service and will be available as a server appliance early next year.

Called Inflection for Enterprise, the solution is powered by Intel’s new Gaudi 3 processors, and it’s designed to “deliver empathetic, conversational, employee-friendly AI capabilities and provide the control, customization and scalability required for complex, large-scale deployments,” according to the two companies.

Flierl said Intel is looking at the possibility of selling Inflection for Enterprise through the chipmaker’s channel partners.

Inflection AI is among a crop of generative AI startups whose founders and employees have been poached by tech giants this year to get an upper hand in the highly competitive AI market as Western regulators scrutinize ties between the small and large organizations.

In March, Microsoft hired Inflection AI CEO Mustafa Suleyman and co-founders to enhance Copilot and other consumer AI pilots, which prompted the startup to put in place a new leadership team and pivot to commercial AI solutions.

Ted Shelton, COO of Inflection’s new leadership team, told CRN that the company plans to offer Inflection for Enterprise in three flavors: public cloud, private cloud and on-premises.

The decision to offer private cloud and on-premises versions is based on feedback from enterprises, including Intel, who say they don’t want to run all their AI applications in the cloud for confidentiality reasons, according to Shelton. (Intel said its’s expected to use Inflection for Enterprise as a customer.)

“Our contrarian view is actually there's a role for not doing cloud, being able to have things in your own private compute environment, and that's what we're delivering today with our Inflection for Enterprise AI system,” he said.

With the private cloud version, Inflection for Enterprise will run on cloud instances that are “completely air-gapped” from the rest of Intel’s cloud infrastructure, according to Flierl.

These private cloud instances will be accessible on a customer’s network, which will give the customer control over the machine along with the software that runs on it, Shelton added. He contrasted this approach with enterprise offerings from OpenAI or Anthropic, which are essentially managed services.

“[The private cloud version] does not require us to be a managed service provider, and the advantage for the customer in that case is really about security and control of their compute environment,” Shelton said.

As for the on-premises version, Inflection AI plans to release its server appliance in the first quarter of 2025, but the company isn’t ready yet to announce which OEMs it’s working with.

Shelton said Inflection AI believes offering customers this level of flexibility at the infrastructure level is the right approach. That’s because the startup expects that most businesses will need a certain level of compute they “want to control on a dedicated basis” for inference purposes, but they may need to temporarily scale up for fine-tuning the AI models that underpin their applications.

“This is actually one of the really important additional advantages of our approach: that when a customer owns their own AI system, they can actually make substantial customizations and modifications that are suitable for their business,” he said.

Inflection AI decided to go with Intel’s Gaudi 3 chips for the Inflection 3.0 system underpinning the enterprise solution after previously using Nvidia GPUs for its consumer-focused Pi AI assistant. Shelton said the main reason for doing so was the “price performance difference” of the Gaudi 3 chips, which Intel has said offer up to roughly two times better price performance than Nvidia H100 GPUs.

“We recognize that, in wanting to be able to offer a product directly to the enterprise that they'd be able to purchase and run themselves, cost was going to be a really important consideration. But also, we wanted to make sure we went with a partner that was well recognized and respected by the enterprise,” he said.