Text: Yang Jianyong.
Last Friday, after Intel released its earnings report, it suffered a heavy fall in the capital market91%, the market value decreased by 24.9 billion US dollars (about 178.7 billion yuan) overnight, and the current market value is 184.5 billion US dollars (about 1.5 billion yuan32 trillion yuan). Intel, as the former chip overlord, is obviously much inferior to Nvidia, with a market value difference of 132 trillion dollars (about 9..)47 trillion yuan), the current market capitalization of Nvidia is 151 trillion dollars (about 1083 trillion yuan).
In response to the sharp drop in shares on Friday, Intel's chief executive responded that the market overreacted to Intel's guidance and said that results will improve quarter by quarter for the rest of 2024. In its earnings report, Intel expects revenue of $12.2 billion to $13.2 billion in the first quarter of 2024.
In the author's view, the data center and artificial intelligence sector in the era of artificial intelligence still face major challenges. Although the PC business is recovering, the overall revenue realization is sluggish.
In 2023, Intel's total revenue will be $54.2 billion, down 14% year-on-year, and net profit will be $1.7 billion, down 79% year-on-year. Among them, the revenue from the client computing division was 29.3 billion US dollars, a year-on-year decrease of 8%; The data center and artificial intelligence segment revenue was 155$2.1 billion, down 20% year-on-year.
You must know that PC and data center and artificial intelligence are Intel's two core pillar business segments, accounting for 82% of revenue6%。Over the past year, revenue has declined due to sluggish global PC demand and significant competitive pressure from data centers and artificial intelligence. Compared with Intel, NVIDIA's data center business segment is growing at a double rate.
In the era of generative AI, the demand for NVIDIA AI has surged, and NVIDIA GPUs in the market are hard to find, which in turn has driven revenue to grow exponentially, and NVIDIA has become the world's largest chip manufacturer in terms of revenue.
In the third quarter of fiscal 2024, Nvidia's data center revenue reached $14.5 billion, up 279% year-over-year. In contrast, Intel's quarterly revenue from the data center and artificial intelligence sector was only about 4 billion yuan, and it fell year-on-year. Overall, in the past few years, Intel's revenue has been sluggish, and the PC computer market has deteriorated, which has had a huge impact on performance. The data center and AI markets face strong competition from NVIDIA and AMD.
It is worth noting that in order to improve the competition with NVIDIA and AMD in the artificial intelligence market, Intel has also launched a series of excellent AI product portfolios, aiming to help users create ubiquitous AI solutions in various fields from data centers, clouds, networks, to edge and PC. Intel's CEO even claimed that Nvidia's CUDA dominance wouldn't last forever.
However, in the era of large models, technology giants such as Google, Meta, Amazon Web Services, Huawei, and Alibaba have successively launched large model services. However, the global technology giants have relied on NVIDIA to develop AI technology, which has led to a surge in demand for NVIDIA AI.
AI is at an inflection point, preparing for widespread adoption in every industry. From start-ups to large enterprises, we're seeing a growing interest in the versatility and capabilities of generative AI. Nvidia CEO Jensen Huang previously said. He also pointed out that from the strong growth, it is clear that various industries are undergoing a platform transformation from general-purpose computing to accelerated computing and generative AI.
Generative AI is making important progress. At the same time, benefiting from the demand for artificial intelligence and cloud computing, companies from all walks of life have used NVIDIA's products for AI computing, resulting in record revenue for NVIDIA's data centers and its stock price rising.
Of course, Intel has also performed well in the capital market, and its market value has exceeded the $200 billion mark. It's just that in the capital market, Nvidia is obviously more favored by investors, and the market value of the two chip giants is trillion-dollar apart.
It should be pointed out that with the gradual improvement of the PC business, Intel's performance has gradually recovered. In the fourth quarter of 2023, Intel's revenue from the PC segment (Client Computing Group) was $8.8 billion, up 33% year-over-year, driving a 10% increase in total revenue for the quarter to $15.4 billion.
Intel CEO Pat Gelsinger said, "We delivered a strong fourth-quarter performance, beating expectations for the fourth consecutive quarter. This quarter caps off 2023, a year in which Intel made significant progress in transforming the company, bringing strong customer momentum to our products by continuing to drive execution and accelerate innovation. In 2024, we will remain relentlessly focused on achieving process and product leadership, continue to build our foundry business and manufacture globally at scale, and execute on our mission to make AI ubiquitous and create long-term value for shareholders and stakeholders.
According to Canalys, global personal computer (PC) market shipments increased 3% year-on-year in the fourth quarter of 2023, ending seven consecutive quarters of year-over-year declines. It is also expected that the full-year shipment volume in 2024 is expected to reach 26.7 billion units, an increase of 8% from 2023.
"To capitalize on the increase in demand, the PC industry will now work on end-of-device AI capabilities to develop more meaningful innovations," said Ishan Dutt, principal analyst at Canalys. It is expected that one-fifth of the PCs shipped in 2024 will have AI capabilities. Canalys also ** AI PC shipments will exceed 1700 million units, of which nearly 60% will be deployed in the commercial sector.
Finally, AI PCs are expected to be in the spotlight in 2024. In order to follow the development trend of the PC industry and significantly improve the AI capabilities of the device, leading chip manufacturers are striving to integrate dedicated AI accelerator blocks (NPUs) into CPUs. At the same time, in order to coincide with the transition of next-generation CPUs and Windows 11, leading Windows PC manufacturers, including Dell, HP and Lenovo, will launch a wave of new models with AI acceleration starting in 2024, in tandem with the new CPU product roadmaps of Intel and AMD to launch new AI PCs.
In the conclusion of the Canalys report, AI PCs will become mainstream in the coming years, and it is highly likely that the PC market will be revitalized and a new era of innovation will be ushered in through the use of AI.
Yang Jianyong is a Forbes China contributor who provides insights into cutting-edge technologies such as the Internet of Things, cloud services, artificial intelligence, and smart homes.