TAIPEI/SAN FRANCISCO, June 4 - Intel ( INTC ) launched its next

generation Xeon server processors on Tuesday as it looks to claw

back data center market share and revealed that its Gaudi 3

artificial intelligence accelerator chips would be priced much

lower than its rivals' chips.

The sixth generation Xeon chips are crucial for Intel ( INTC ), which

has been steadily losing data center market share to AMD.

Intel's ( INTC ) share of the data center market for x86 chips has

declined 5.6 percentage points over the past year to 76.4%, with

AMD now holding 23.6%, according to data from Mercury Research.

Stumbles with Intel's ( INTC ) manufacturing process have allowed AMD

to take business as it uses Taiwan Semiconductor Manufacturing

Co ( TSM ) to fabricate its chips.

The Xeon 6 server processors come in two main flavors, a

larger, more powerful version, and an "efficiency" model that

Intel ( INTC ) pitched as a replacement for older-generation chips.

To achieve the same level of computing power as its second

generation chips will now require about 67% fewer server racks

with the efficiency model, which is designed to serve media,

websites and perform database calculations.

The more powerful performance model is designed to run the

computations necessary to generate responses from complex AI

models and other tasks that need the increased horsepower.

The efficiency Xeon chip is available on Tuesday, with the

"performance" model arriving in the third quarter. Intel ( INTC ) plans

to launch additional variations next year. The sixth generation

chip was delayed a year because the company wanted to use a

different manufacturing process.

On a briefing call with reporters, Intel ( INTC ) said that a Gaudi 3

accelerator kit, which includes eight of the AI chips, sells for

about $125,000, and the earlier generation Gaudi 2 has a list

price of $65,000.

AMD and Nvidia ( NVDA ) do not discuss pricing of their chips. A

comparable HGX server system with eight Nvidia H100 AI chips can

cost more than $300,000, according to custom server vendor

Thinkmate.

Intel ( INTC ) revealed the details of the Gaudi 3 AI chip in April

and has positioned it as a considerably cheaper and viable

alternative to Nvidia's ( NVDA ) H100 chips.

Also on Tuesday, Intel ( INTC ) said its next generation laptop chip,

called Lunar Lake, uses 40% less power and has more a powerful

AI processor in it. Intel ( INTC ) said it will ship the chip in the

third quarter.