What Are AI Chips?

Evolution, Benefits, and Top Manufacturers

What Is AI Technology?

Artificial intelligence (AI) is transforming our world, and an important part of the revolution is the need for massive amounts of computing power. Machine learning algorithms are getting more complex every day, and require more and more computing power for training and inference.

At first, AI workloads ran on traditional central processing units (CPUs), leveraging the power of multi-core CPUs and parallel computing. Several years ago, the AI industry discovered that graphical processing units (GPUs) were very efficient at running certain types of AI workloads. But standard GPUs are no longer enough for those on the cutting edge of AI development, leading to the development of even more specialized hardware.

While GPUs can be considered AI chips, there are now hardware devices designed from the ground up to perform AI tasks, more efficiently than traditional CPUs or GPUs can do. We’ll review how GPUs and newer, specialized processors can handle large amounts of data and complex computations in parallel, making them highly efficient for machine learning workloads.

This is part of a series of articles about machine learning engineer.

In this article:

Evolution of AI Chip Technology

Graphics Processing Units (GPUs)

Originally designed for rendering high-resolution graphics and video games, GPUs quickly became a commodity in the world of AI. Unlike CPUs that are designed to perform only a few complex tasks at once, GPUs are designed to perform thousands of simple tasks in parallel. This makes them extremely efficient at handling machine learning workloads, which often require huge numbers of very simple calculations, such as matrix multiplications.

However, while GPUs have played a crucial role in the rise of AI, they are not without their limitations. GPUs are not designed specifically for AI tasks, and as such, they are not always the most efficient option for these workloads. This has led to the development of more specialized AI chips, such as Application-Specific Integrated Circuits (ASICs) and Field-Programmable Gate Arrays (FPGAs).


ASICs and FPGAs represent the next step in the evolution of AI chip technology. ASICs, or Application-Specific Integrated Circuits, are chips that are custom-built for a specific task or application. In the case of AI, ASICs are designed to handle specific AI workloads, such as neural network processing. This makes them very efficient at these tasks, but less flexible than other types of chips.

FPGAs, or Field-Programmable Gate Arrays, are chips that can be programmed to perform a wide range of tasks. They are more flexible than ASICs, making them a great choice for a variety of AI workloads. However, they are also generally more complex and expensive than other types of chips.

Neural Processing Units (NPUs)

The most recent development in AI chip technology is the Neural Processing Unit (NPU). These chips are designed specifically for the processing of neural networks, which are a key component of modern AI systems. NPUs are optimized for the high-volume, parallel computations that neural networks require, which includes tasks like matrix multiplication and activation function computation.

NPUs typically feature a large number of small, efficient processing cores capable of performing simultaneous operations. These cores are optimized for the specific mathematical operations commonly used in neural networks, such as floating-point operations and tensor processing. NPUs also have high-bandwidth memory interfaces to efficiently handle the large amount of data that neural networks require.

Another key aspect of NPU design is power efficiency. Neural network computations can be power-intensive, so NPUs often incorporate features that optimize power consumption, such as dynamic scaling of power based on computational demand and specialized circuit designs that reduce energy usage per operation.

Related content: Read our guide to AI infrastructure

Benefits of AI Chips

AI chips present several compelling benefits for the AI and data science industry:


Traditional CPUs are not designed to handle the parallel processing requirements of AI and machine learning workloads. AI chips, on the other hand, are designed specifically for these tasks, making them significantly more efficient.

This increased efficiency can have a huge impact on the performance of AI systems. For example, it can allow for faster processing times, more accurate results, and the ability to handle larger and more complex workloads at lower cost.

Energy Savings

Another key benefit of AI chips is their potential for energy savings. AI and machine learning workloads can be incredibly power-hungry, and running these workloads on traditional CPUs can lead to significant energy consumption.

AI chips, however, are designed to be more energy-efficient than traditional CPUs. This means that they can perform the same tasks at a fraction of the power, leading to significant energy savings. This is not only beneficial for the environment, but it can also lead to cost savings for businesses and organizations that rely on AI technology.

Improved Performance

Finally, AI chips can lead to improved performance in AI systems. Because they are designed specifically for AI tasks, they are capable of handling complex computations and large amounts of data more efficiently than traditional CPUs.

This can result in faster processing times, more accurate results, and enables applications that require low latency response to user requests.

Challenges of Organizations Adopting AI Chips

While they are highly beneficial, the development and implementation of AI chips present a unique set of challenges:

Complex Implementation

Implementing AI chips within an organization's existing technology infrastructure presents a significant challenge. The specialized nature of AI chips often requires a redesign or substantial adaptation of existing systems. This complexity extends not just to hardware integration but also to software and algorithm development, as AI chips typically require specialized programming models and tools.

Additionally, the skill set required to effectively implement and optimize AI chip-based systems is still relatively rare. Organizations must either invest in training their existing workforce or recruit new talent with the necessary expertise. This need for specialized knowledge can create barriers to entry for smaller organizations or those new to the field of AI.


The research and development costs associated with designing highly specialized chips are significant. Additionally, the manufacturing process for AI chips, particularly advanced ones like ASICs and NPUs, can be more complex and costly than that for standard CPUs or GPUs. These additional costs are passed on to end users, resulting in higher hardware costs.

For organizations looking to integrate AI chips into their systems, there is a significant investment in infrastructure. This makes it challenging for smaller organizations or those with limited budgets to leverage the advantages of AI chips.

Obsolescence Risk

AI technology is advancing at a rapid pace, leading to a continuous cycle of innovation and new product development in the AI chip market. This fast pace of development carries with it the risk of obsolescence, as newer, more efficient chips are constantly being released. Organizations investing in AI chip technology face the challenge of their hardware becoming outdated relatively quickly, potentially requiring frequent upgrades.

This risk of obsolescence can lead to hesitancy in investment, particularly for organizations with limited budgets. The balance between staying at the forefront of technology and managing costs is a delicate one, requiring careful strategic planning and consideration of long-term technological trends.

Who Are the Leading AI Chip Manufacturers?


NVIDIA is currently the leading provider of AI chips. Previously known for its GPUs, in recent years NVIDIA developed dedicated AI chips, like Tensor Core GPUs and the NVIDIA A100, considered the most powerful AI chip in the world at the time of this writing.

The A100 features Tensor Cores optimized for deep learning matrix arithmetic and has a large, high-bandwidth memory. Its Multi-Instance GPU (MIG) technology allows multiple networks or jobs to run simultaneously on a single GPU, enhancing efficiency and utilization. Additionally, NVIDIA's AI chips are compatible with a broad range of AI frameworks and support CUDA, a parallel computing platform and API model, which makes them versatile for various AI and machine learning applications.


AMD, traditionally known for CPUs and GPUs, has entered the AI space with products like the Radeon Instinct GPUs.

Radeon Instinct GPUs are tailored for machine learning and AI workloads, offering high-performance computing and deep learning capabilities. These GPUs feature advanced memory technologies and high throughput, making them suitable for both training and inference phases. AMD also provides ROCm (Radeon Open Compute Platform), enabling easier integration with various AI frameworks.


Intel is the world’s second largest chip manufacturer by revenue. Its venture into AI chips includes a range of products, from CPUs with AI capabilities to dedicated AI hardware like the Habana Gaudi processors, which are specifically engineered for training deep learning models.

Habana Gaudi processors stand out for their high efficiency and performance in AI training tasks. They are designed to optimize data center workloads, providing a scalable and efficient solution for training large and complex AI models. One of the key features of Gaudi processors is their inter-processor communication capabilities, which enable efficient scaling across multiple chips. Like their NVIDIA and AMD counterparts, they are optimized for common AI frameworks.

AI Chip Management and Virtualization With Run:ai

Run:ai automates resource management and workload orchestration for machine learning infrastructure. With Run:ai, you can automatically run as many deep learning experiments as needed on multi-GPU infrastructure.

Here are some of the capabilities you gain when using Run:ai:

  • Advanced visibility—create an efficient pipeline of resource sharing by pooling GPU compute resources.
  • No more bottlenecks—you can set up guaranteed quotas of GPU resources, to avoid bottlenecks and optimize billing.
  • A higher level of control—Run:AI enables you to dynamically change resource allocation, ensuring each job gets the resources it needs at any given time.

Run:ai simplifies machine learning infrastructure pipelines, helping data scientists accelerate their productivity and the quality of their models.

Learn more about the Run:ai GPU virtualization platform.