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Intel buys Israeli AI to boot, Habana Labs for up to $2 billion

JERUSALEM (Reuters) – Intel Corp. (nasdaq: msft has bought the Israel-based artificial intelligence (AI) company, Habana Labs, for approximately $2 billion, and the chipmaker said on Monday, seeking to extend to the AI’s portfolio to bolster its data-center business.

FILE PHOTO: The Intel logo is displayed at the E3, the world’s largest video game industry convention in Los Angeles, California, USA, June 12, 2018. REUTERS/Mike Blake/File Photo

Intel is expected that the fast-growing COMPUTER-chip market at more than $25 billion in 2024, with its own AI, revenues this year will increase by 20% by 2018 and more than $3.5 billion.

Intel is increasingly reliant on its sales to data centers, and PC sales are stagnant.

Habana, a computer processor company, which was founded in 2016, and has offices in Tel-Aviv, San Jose, Beijing, Gdansk, Poland. It has raised $120 million, including $75 million in a funding round led by Intel Capital, last year.

The deal follows a string of COMPUTER-related acquisitions for Intel in the past few years, including Movidius, Nervana, Altera, and Mobileye.

Navin Shenoy, who manages the Intel data center group, told Reuters in an interview that, for each set of chips is designed to solve a different problem, or with the help of the cars to drive themselves, or for training machine-learning algorithms in a data center.

Shenoy said in Havana’s chips are aimed at the so-called deep learning, which is a subset of the machine learning is done in data centers.

“What we’re hearing from our customers that there will be a heterogonous set of needs,” Shenoy said. “The market opportunities are significant, and large enough that we can build a specialist portfolio to deal with these problems, and do it in a way that customers feel about and react to that very well.”

Havana has launched its new Gaudi, the AI training, the processor in June, which it said will provide much higher processing speeds in order to compete with similar offerings from Intel’s arch-rival Nvidia Corp. (a)

Nvidia played Intel in March to buy Israeli chipmaker Mellanox to $6.9 billion, is the stimulation of the data-center chip business.

Habana continues to be a stand-alone business unit, which is led by the current management team and will report to Intel’s data platforms group.

The company will continue to be based in Israel and is the Chairman Avigdor Willenz, it will serve as a senior adviser to Intel, the companies said.

Willenz sold to the chip designer, and Galileo Technologies to Marvell Technology Group for $2.7 billion in 2001, and it’s Going to Amazon for an estimated $370 million at the end of 2015.

With five facilities, with Intel already has a significant presence in Israel, and has grown to become one of the country’s top exporters since the launch of its operations in 1974.

The California-based chip giant is to move the automotive technologies is headquartered at Jerusalem, after the purchase by Mobileye for about $15 billion a year in 2017. It is investing $11 billion for the expansion of the local chip factory, and has launched a tech accelerator in Israel, in the month of June.

– Additional reporting by Tova Cohen in Tel Aviv; Munsif Vengattil and Amal in Bengaluru; and Stephen Nellis in San Francicso; Editing by Sriraj Kalluvila, Kirsten Donovan and Mark Potter

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