Intel Acquires Israeli AI Chipmaker Habana Labs for $2 Billion in Cash

Executive Summary

On December 16, 2019, Intel announced the acquisition of Habana Labs, an Israel-based developer of programmable deep learning accelerators for the data center, for approximately $2 billion in cash.

• Habana Labs is an artificial intelligence (AI) processor company founded in 2016 to design processor platforms optimized for training deep neural networks and for inference deployment in production environments.
• Intel expects the acquisition to strengthen its AI portfolio and accelerate its efforts in the nascent, fast-growing AI silicon (i.e., chip) market, which it expects to be worth more than $25 billion by 2024. The AI silicon market for data centers within this broader market is estimated to hit $10 billion in that same time frame.
• In 2019, Intel expects to generate more than $3.5 billion in revenue from AI-driven products, up more than 20% year over year.
• AI is a fundamental technology for deploying machine learning to offer predictive analytics, customization and personalization in retail. Intel is deploying its own cash to accelerate development or to fill gaps in its product portfolio to be a major player in the AI hardware sector.