This Could Hurt NVIDIA Corporation (NVDA) And Advanced Micro Devices, Inc. (AMD) Stock

So What’s The Net Result Of This War Of Words?

Intel’s next generation of Xeon Phi is expected to be launched in 2017, and we will probably have to wait until then for conclusive results. However, it’s worth noting that irrespective of the claims that NVIDIA Corporation (NASDAQ:NVDA) has hurled at Intel, the latter seems to be finding favor indeed, at least from Chinese search giant Baidu Inc (ADR) (NASDAQ:BIDU). Baidu will reportedly use Xeon Phi chips to power Deep Speech, its natural language processing service, rather than using Nvidia’s GPUs, which the company used thus far to run its deep learning models.

Also Read: Don’t Buy NVIDIA Corporation (NVDA) Stock Just Yet.

Summing It Up

Specifically in the case of NVIDIA Corporation (NASDAQ:NVDA), much of the stocks dream run in 2016 was based on optimism around the company’s prospects in this small, but fast growing space. As for Advanced Micro Devices, Inc. (NASDAQ:AMD), much is expected from its Vega line up of GPUs, which some expect, will even outdo Nvidia’s best GPU, dubbed Titan X.

Expectations from AMD in the AI and deep learning space also found new fuel in the company’s recent deal with Google, which will avail Advanced Micro Devices, Inc. (NASDAQ:AMD)’s GPUs a spot in Google’s cloud offerings. However, if Intel does manage to edge out GPUs from AI applications, both AMD and Nvidia will stand to lose. And as Intel looks set to end its GPU tech licensing agreement with Nvidia this March, which could drag the latter’s EBITDA by as much as 17%, the Chipzilla could end up dealing a double blow to Nvidia.

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Additional Links:

(1) https://www.extremetech.com/computing/239768-intel-announces-major-new-ai-push-upcoming-knights-mill-xeon-phi-custom-silicon?ref=il

(2) http://www.forbes.com/sites/aarontilley/2016/08/17/intel-takes-aim-at-nvidia-again-with-new-ai-chip-and-baidu-partnership/#302a02664f5a?ref=il

(3) https://blogs.nvidia.com/blog/2016/08/16/correcting-some-mistakes/?ref=il