Rumor: Intel Allegedly Spent $3.5 Billion on Arc GPU Development, Considering Cancelling Project

Buzz

These are analyses and statements from market research firm Jon Peddie Research (JPR). Intel's Arc GPU architecture development division is the youngest unit of one of the oldest semiconductor chip manufacturers in the world. According to JPR estimates, the Accelerated Computing Systems and Graphics (AXG) group, responsible for researching Intel's discrete graphics chips, represents a $3.5 billion investment, appearing in Intel's financial reports since last year's first quarter.

Moreover, JPR even suggests that Intel might cancel the entire GPU development project and disband the team of engineers and developers within the AXG group. The market research firm does not specifically mention their sources, but relies on rumors they have acquired:

Should Intel dissolve the AXG team? Perhaps. They commenced this project six years ago. Since then, both AMD and Nvidia have each released 6 generations of powerful GPUs, with numerous new architectures in development. Four new companies have been established in China and two in the U.S. Intel now faces two much stronger AMD and Nvidia conglomerates, not to mention 6 new startups. The market situation has changed significantly, yet Intel continues to invest in projects with uncertain success.

The best course of action for Intel now is to seek partners and divest from unnecessary areas. This could even be viewed as a strategic move, similar to the decision to opt for TSMC for GPU outsourcing right from the start. Intel cannot afford to continue paying massive salaries to the AXG team, while also paying a seasoned fab to manufacture wafers containing chip dies, and then seeking government subsidies for their investments in constructing new chip fabrication fabs, places that may not even be capable of producing the chips they are designing. This investment strategy not only causes confusion but also demonstrates Intel's dilemma.

Intel has stumbled before. For instance, there was a time when they refused to manufacture processing chips for phones, only to express regret for missing the opportunity a few years later. Most recently, they had to sell their 5G modem development division to Apple. Although the computer GPU market is extremely promising, there is no guarantee that Intel won't cut losses by shutting down this entire project altogether.

According to WCCFTech

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