Intel gets DigitalBridge backing for proposed spin-off of AI company Articul8AI

Intel $Intel (INTC.US)$ said Wednesday it will form a new standalone company around its artificial intelligence software business with the backing of digital asset manager DigitalBridge Group $DigitalBridge Group (DBRG.US)$ and other investors. The new company, called Articul8AI, will not be publicly traded and is a spin-off from Intel's initial partnership with The Boston Consulting Group (BCG) to develop enterprise AI technology.

For the value of the deal and Intel will retain a majority stake in the new company, Intel executives do not comment, only that the company will have an independent board of directors, and Intel will remain one of the shareholders.

Previously, Intel used a supercomputer, combined with open source technology and internally developed technology, to develop a generative AI system capable of reading text and images. Intel then modified the system so that it could run in BCG's own data center to help address BCG's privacy and security concerns.

Arun Subramaniyan, who was vice president and general manager of Intel's Data Center and Artificial Intelligence Division, will be Articul8's CEO. He said that many other potential customers have expressed similar reservations about giving their data to large cloud computing companies for AI processing.

"We've been working on the biggest problem with generative AI right now, which is that it's easy to build proofs of concept, but what's really missing is getting things into production and doing it in a way that's safe and cost-sustainable", Subramanian said in an interview.

Intel's creation of Articul8 is its latest move to seek outside capital for its business units. It comes on the heels of its spin-off of automotive chip company Mobileye Global $Mobileye Global (MBLY.US)$ and plans to eventually conduct an initial public offering (IPO) of its programmable chip unit.