By Stephen Nellis
(Reuters) - Intel (NASDAQ:INTC) on Wednesday said it was forming a new independent company around its artificial intelligence software efforts with backing from digital-focused asset manager DigitalBridge Group and other investors.
Intel executives would not comment on the value of the deal or whether it would retain a majority stake in the new venture, other than to say the firm would have an independent board of directors and the chipmaker would remain a shareholder.
The new entity, which will not be publicly traded and will be called Articul8 AI (pronounced "Articulate AI"), is an outgrowth of work on corporate AI technology that Intel initially carried out with Boston Consulting Group (BCG).
Using one of its own supercomputers, Intel developed a generative AI system that can read text and images using a combination of open-source and internally developed technology. Intel then modified that system to run inside BCG's own data centers to help address BCG's privacy and security concerns.
Arun Subramaniyan, who was formerly vice president and general manager in Intel’s data center and AI group and will become chief executive of Articul8, said many other potential customers expressed similar reservations about turning their data over to large cloud computing companies for AI work.
He also said potential customers were concerned about runaway costs if thousands of their employees start using the systems.
"We've been really trying to address the biggest gap in generative AI today, which is that building a proof of concept is easy, but getting things into production and doing it safely and in a cost sustainable way is really what is missing," Subramaniyan said in an interview.
Intel's move to create Articul8 is its latest move to seek outside capital for business units.
The chipmaker spun out car chip firm Mobileye Global (NASDAQ:MBLY) and plans an eventual initial public offering of its programmable chip unit.
Beyond DigitalBridge, which is publicly traded and a major investor in data centers, other Articul8 investors include Fin Capital, Mindset Ventures, Communitas Capital, GiantLeap Capital, GS Futures and Zain Group.