Intel acquires Israeli chipmaker Habana Labs for $2 billion

The acquisition is the company's second largest in Israel to date.

By EYTAN HALON

DECEMBER 16, 2019 17:07

The logo of Intel, the world's largest chipmaker is seen at their offices in Jerusalem

(photo credit: REUTERS)

American technology giant Intel Corp. has acquired Israeli AI processor developer Habana Labs in a deal worth approximately $2 billion, the companies announced on Monday.

Founded by David Dahan and Ran Halutz in 2016, Tel Aviv-headquartered Habana Labs is the developer of powerful artificial intelligence processors, optimized for training deep neural networks and artificial intelligence systems, and for deployment in production environments.

Intel said the acquisition, the company's second largest in Israel to date, will strengthen its artificial intelligence portfolio and accelerate its efforts in the fast-growing AI silicon market, expected to be worth more than $25b. by 2024.

"This acquisition advances our AI strategy, which is to provide customers with solutions to fit every performance need – from the intelligent edge to the data center," said Navin Shenoy, Intel executive vice president and general manager of the Data Platforms Group.

"Our combined IP and expertise will deliver unmatched computing performance and efficiency for AI workloads in the data center."

Habana will continue to operate as an independent business unit in Israel following the acquisition, led by its current management team. Chairman Avigdor Willenz will serve as a senior advisor to both the business unit and to Intel.

The company currently employs 150 people worldwide at its offices in Tel Aviv, Caesarea, California, Beijing and Gdańsk.

"We have been fortunate to get to know and collaborate with Intel given its investment in Habana, and we’re thrilled to be officially joining the team," said Habana CEO David Dahan.

"Intel has created a world-class AI team and capability. We are excited to partner with Intel to accelerate and scale our business. Together, we will deliver our customers more AI innovation, faster."

Prior to the acquisition, in November 2018, Intel Capital - the strategic investment arm of the Santa Clara-headquartered chipmaker - led a $75 million Series B round of fundraising for Habana.

The purchase of Habana represents Intel's second largest in Israel to date and the latest in a long line of investments in the country. In August 2017, Intel purchased Jerusalem-based vision technology company Mobileye for a record $15.3b., the largest sale or “exit” of an Israeli company yet.

Intel, which has been active in Israel since 1974, employs nearly 13,000 workers in the country, exporting products worth $3.9b. in 2018 and procuring local materials and services worth $1.7b., primarily from peripheral areas.

In January, Intel announced plans to invest approximately $10.9b. in the company’s Israel-based operations to construct a vast production facility in Kiryat Gat. The 370,000 sq.m. expansion is expected to add 1,000 new employees to Intel’s existing workforce.