Alexander Koerner—Getty Images

Intel Rolls Out New Chips in the Battle for Data Center Business

Jul 12, 2017

Intel (intc) on Tuesday announced a new line of microprocessors for data centres, setting up a battle with Advanced Micro Devices (amd) and others for the lucrative business of supplying the chips that power cloud computing.

The new Xeon Scalable Processor chips provide far greater support for next-generation computing applications such as artificial intel ligence and driverless cars, said Naveen Rao, vice president of Intel's artificial intel ligence products group, in an interview with Reuters.

The chips are aimed at companies including Alphabet's Google (googl), Microsoft (msft), (amzn) and others that operate data centre s with thousands of computers, both to power their own services and to provide computing horsepower for customers who don't want to own and maintain their own computer systems.

Google Cloud Platform was the first data center to adopt the new Intel processors. Paul Nash, project manager for Google Compute Engine, called the deal an "expansion and deepening of our partnership" with Intel .

But Intel will face stiff competition from historic rival AMD, which recently launched its own next-generation data centre processor. The big Internet companies are also doing more of their own hardware design and experimenting with chips based on technology from ARM Holdings (armh) and others, partly as a way of pushing Intel to keep prices in line.

For more on Intel, watch Fortune's video:

Martin Reynolds, an analyst at Gartner, said the new Intel processor is a step up from its previous generation with better power efficiency, improvement on artificial intel ligence workload and more advanced storage.

Reynolds noted that the biggest risk for Intel may be its dependence on a relatively small number of big data center operators.

"The challenge now is so much of our their work is going to these big internet guys," he said, and thus demand for chips is subject to how successful the companies are in the fierce battle for customers who are moving their computing to the cloud.

All products and services featured are based solely on editorial selection. FORTUNE may receive compensation for some links to products and services on this website.

Quotes delayed at least 15 minutes. Market data provided by Interactive Data. ETF and Mutual Fund data provided by Morningstar, Inc. Dow Jones Terms & Conditions: S&P Index data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Terms & Conditions. Powered and implemented by Interactive Data Managed Solutions