Intel attempting a pivot to AI
Financial literacy far below par, study finds
THE computers in modern data centres – the engine rooms of the digital economy – are powered mainly by Intel chips. They animate the computing clouds of the internet giants and corporate data centres worldwide.
But Intel is facing new competitive forces that could pose a challenge to its data-centre dominance and profitability.
In particular, the rise of artificial intelligence is creating demand for new computing hardware tailored to handle vast amounts of unruly data and complex machine-learning software – and Intel’s generalpurpose chips are not yet tuned for the most demanding tasks. Instead, specialised chips are delivering better performance on artificial intelligence programmes that identify images, recognise speech and translate languages.
Intel is hurrying to catch the AI wave. Yesterday, to deal with the changing competitive landscape, the Silicon Valley giant was set to present its newest data-centre strategy at an event in New York, addressing its AI plans and its mainstream data-centre business. The company has billed the event as its “biggest data-centre launch in a decade”.
How successful its efforts prove to be will be crucial not only for Intel but also for the long-term future of the computer chip industry.
“We’re seeing a lot more competition in the data-centre market than we’ve seen in a long time,” said Linley Gwennap, a semiconductor expert who leads a technology research firm in Mountain View, California.
Intel has long dominated the business for central processing chips that control industrystandard servers in data centres. Matthew Eastwood, an analyst at IDC, said the com- pany controlled about 96 percent of such chips.
But others are making inroads into advanced data centres. Nvidia, a chipmaker in Santa Clara, California, does not make Intel-style central processors. But its graphicsprocessing chips, used by gamers in turbocharged personal computers, have proved well suited for AI tasks. Nvidia’s data-centre business is taking off, with the company’s sales surging and its stock price nearly tripling in the last year.
Big Intel customers like Google, Microsoft and Amazon are also working on their own chip designs. AMD and ARM, which make central processing chips like Intel, are edging into the data-centre market, too. IBM made its Power chip technology open source a few years ago, and Google and others are designing prototypes.
To counter some of these trends, Intel was expected yesterday to provide details about the performance and uses of its new chips and its plans. The company is set to formally introduce the next generation of its Xeon data-centre microprocessors, code-named Skylake. And there will be a range of Xeon offerings with different numbers of processing cores, speeds, amounts of attached memory, and prices.
Yet analysts said that would represent progress along Intel’s current path rather than an embrace of new models of computing.
Stacy Rasgon, a semiconductor analyst at Bernstein Research, said, “They’re late to artificial intelligence.”
Intel disputes that characterisation, saying that artificial intelligence is an emerging technology in which the company is making major investments. In a blog post last fall, Brian Krzanich, Intel’s chief executive, wrote that the company is “uniquely capable of enabling and accelerating the promise of AI”.
Intel has been working in several ways to respond to the competition in data-centre chips. The company acquired Nervana Systems, an artificial intelligence startup, for more than $400 million last year. In March, Intel created an AI group, headed by Naveen G Rao, a founder and former chief executive of Nervana.
The Nervana technology, Intel has said, is being folded into its product road map. A chip code-named Lake Crest is being tested and will be available to some customers this year.
Lake Crest is tailored for AI programmes called neural networks, which learn specific tasks by analysing huge amounts of data. Feed millions of cat photos into a neural network, and it can learn to recognise a cat – and later pick out cats by colour and breed. The principle is the same for speech recognition and language translation.
Intel’s challenge, analysts said, is the classic one of adapt- ing an extraordinarily successful business to a fundamental shift in the marketplace.
As the dominant data-centre chipmaker, used by a wide array of customers with different needs, Intel has loaded more capabilities into its central processors. It has been an immensely profitable strategy for Intel, which last year had net income of $10.3 billion on revenue of $59.4 billion.
Yet key customers increasingly want computing designs that parcel out work to a collection of specialised chips rather than have that work flow through the central processor. A central processor can be thought of as part brain, doing the logic processing, and part traffic cop, orchestrating the flow of data through the computer.
The outlying, specialised chips are known in the industry as accelerators. They can do certain things, like data-driven AI tasks, faster than a central processor. Accelerators include graphics processors, application-specific integrated circuits (ASICs) and field-programmable gate arrays (FPGAs).
A more diverse set of chips does not mean the need for Intel’s central processor goes away. The processor just does less of the work, becoming more of a traffic cop and less of a brain. If this happens, Intel’s business becomes less profitable.
Intel is not standing still. In 2015, it paid $16.7 billion for Altera, a maker of field-programmable gate arrays, which make chips more flexible because they can be repeatedly reprogrammed with software.
Gwennap, the independent analyst, said, “Intel has a very good read on data centres and what those customers want.”
Still, the question remains whether knowing what the customers want translates into giving them what they want, if that path presents a threat to Intel’s business model and profit margins. FINANCIAL literacy in Cambodia continues to chalk up low rankings, although the level of understanding of financial products available is largely in line with expectations based on the Kingdom’s current GDP, according to a new study.
The Asian Development Bank Institute (ADBI) said in a report released yesterday that it conducted surveys in Cambodia and Vietnam to measure financial literacy across various segments of the population, differentiating the results by age group, income level and education.
Cambodia received a total score of 11.5 out of a possible 21, while Vietnam scored 12, according to the report, much lower than the average from surveys conducted in 30 Organisation for Economic Cooperation and Development (OECD) member countries.
“These scores are much lower than the 30-country average score of 13.3 and those of some other developing Asian economies such as Thailand (12.8) and Malaysia (12.3),” the report said. “However, these results may be taken as being neutral to positive, given that the levels of per capita income in those two countries are considerably lower than those in any of the other 30 countries in OECD.”
Only 17 percent of Cambodians could answer five out of seven questions on financial knowledge in the survey correctly, which is considered a baseline for financial literacy, the report showed. This is compared to 26.6 percent inVietnam and 56 percent for the 30 OECD countries.
“In both countries, younger and higher-income respondents have higher financial knowledge scores,” it said. “While there is no difference in financial knowledge between rural residents and urban residents in Cambodia, there is a significant gap between the two groups in Vietnam.”
The report also shows that education plays an important role in financial literacy, and in Cambodia respondents with a tertiary education scored higher than respondents who only completed secondary or primary education. The different levels of financial understanding have a significant impact of savings behaviour of individuals, it added.
“With regards to savings behaviour, only 11.5 percent of Cambodian respondents reported having savings products, while the figure is 23.4 percent in Vietnam,” the report said.
According to figures in the report, only 16 percent of respondents in Cambodia do not save in any form, while 71.5 percent save through informal channels.