Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below.

Intel Corp. (NASDAQ:INTC) has a Gaudi problem on its hands – the chipmaker revealed that its AI accelerator won't even make $500 million in 2024, falling short of CEO Pat Gelsinger's target of $1 billion to $2 billion.

What Happened: Gelsinger revealed during Intel's third-quarter earnings call that the Gaudi AI accelerator program will fall short of revenue targets due to a transition from second to third generation.

"The overall uptake of Gaudi has been slower than we anticipated as adoption rates were impacted by the product transition from Gaudi 2 to Gaudi 3 and software ease of use," Gelsinger said.

Don’t Miss:

• If there was a new fund backed by Jeff Bezos offering a 7-9% target yield with monthly dividends would you invest in it?

• Can you guess how many retire with a $5,000,000 nest egg? More than you think! People are using this free retirement questionnaire to speak to a vetted financial advisor about their pacing towards retirement.

"As a result, we will not achieve our target of 500 million in revenue for Gaudi in 2024. That said, taking a longer term view, we remain encouraged by the market available to us."

Subscribe to the Benzinga Tech Trends newsletter to get all the latest tech developments delivered to your inbox.

This comes at a critical time for Intel – the iconic chipmaker's stock is down nearly 55% in 2024 so far, which has drawn attention from rival Qualcomm Inc. (NASDAQ:QCOM), which is reportedly eyeing a takeover of Intel.

While it is not clear if this will eventually materialize, it points to a weak phase that Intel is going through.

Three of the biggest chip makers – Nvidia Corp. (NASDAQ:NVDA), Intel, and Advanced Micro Devices Inc. (NASDAQ:AMD) – all have their respective data center business segments which have gained traction in 2023.

See Also: Commercial real estate has historically outperformed the stock market, and this platform allows individuals to invest in commercial real estate with as little as $5,000 offering a 12% target yield with a bonus 1% return boost today!s 1% return boost today!

While Intel led in 2022, the company's data center revenue started declining in 2023, coinciding with Nvidia's rise. On the other hand, 2022 and 2023 were both lukewarm for AMD, but it started gathering pace in the fourth quarter of 2023.

Here's how Nvidia, Intel, and AMD's data center business has performed since 2022.

Source: Nvidia, Intel, and AMD | Nvidia's Q3 2024 results have not been announced yet.