Intel Beefs Up AI Portfolio With $2B Purchase Of Israeli Startup Habana Labs

Intel Corporation INTC announced the strategic acquisition Monday of an Israeli startup company that makes AI chips.

The Intel, Habana Deal Terms

The Santa Clara, California-based chipmaker said it has acquired Israel-based Habana Labs for $2 billion.

Habana Labs is a developer of programmable deep learning accelerators for the data center.

Habana's product stable includes the Gaudi AI Training processor, which it is sampling with select hyperscale customers, and the Goya AI Inference Processor, which is a commercial product.

Intel said Habana will remain an independent business unit that reports to Intel's Data Platforms Group and will be led by its current management team. It will continue to be based out of Israel.

Habana Chairman Avigdoe Willenz will serve as a senior advisor to the business unit as well as to Intel.

Habana 'Turbocharges' Intel's AI Offerings 

Intel said it expects the purchase to strengthen its AI portfolio and accelerate its efforts to capitalize on the fast-growing AI chip market, which it estimates will exceed $25 billion by 2024.

"More specifically, Habana turbo-charges our AI offerings for the data center with a high-performance training processor family and a standards-based programming environment to address evolving AI workloads," Navin Shenoy, Intel's executive vice president and general manager of data platforms, said in a statement. 

Intel expects to generate over $3.5 billion in AI-driven revenue in 2019, representing 20% year-over-year growth.

For Habana, the combination with Intel will create access to Intel's AI capabilities, helping the startup scale and accelerate.

Intel shares ended Friday's session down 0.16% at $57.70. 

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Habana Labs Chairman Avigdor Willenz, who will serve as a senior adviser to the business unit as well as to Intel after Intel's purchase of Habana. Photo by Eyal Toueg of Intel Corp.