Intel acquires Israeli AI startup Habana Labs for $2 billion to expand its AI portfolio and bolster its data-center business

Chipmaker Intel announced Monday it has acquired Habana Labs, an Israel-based developer of programmable deep learning accelerators for the data center, for approximately $2 billion. The acquisition will help the tech giant expand its AI portfolio to bolster its data-center business. The combination strengthens Intel’s artificial intelligence (AI) portfolio and accelerates its efforts in the nascent, fast-growing AI silicon market, which Intel expects to be greater than $25 billion by 20241.

Founded in 2016 David Dahan and Ran Halutz, Habana Labs develops processors optimized for artificial intelligence applications. The two founders were both former executives at PrimeSense Limited, acquired by Apple for $360 million in 2013. Habana Labs aims to unlock the true potential of AI by providing an order of magnitude improvements in processing performance, cost and power consumption. Since inception in 2016, Habana had raised $120 million in funding, Intel Capital also led a $75 million of the total raised in a November 2018

Habana Labs set out to develop AI processors from the ground up, optimized for the specific needs of training deep neural networks and for inference deployment in production environments. Habana Labs is a fabless semiconductor company located in Tel-Aviv, Israel and San Jose, California, Beijing and Gdansk, Poland. The startup currently employs over 150 people worldwide. Habana has raised $120 million to date, including $75 million in a funding round led by Intel Capital last year.

“This acquisition advances our AI strategy, which is to provide customers with solutions to fit every performance need – from the intelligent edge to the data center,” said Navin Shenoy, executive vice president and general manager of the Data Platforms Group at Intel. “More specifically, Habana turbo-charges our AI offerings for the data center with a high-performance training processor family and a standards-based programming environment to address evolving AI workloads.”

Intel’s AI strategy is grounded in the belief that harnessing the power of AI to improve business outcomes requires a broad mix of technology – hardware and software – and full ecosystem support. Today, Intel AI solutions are helping customers turn data into business value and driving meaningful revenue for the company. In 2019, Intel expects to generate over $3.5 billion in AI-driven revenue, up more than 20 percent year-over-year. Together, Intel and Habana can accelerate the delivery of best-in-class AI products for the data center, addressing customers’ evolving needs.