Intel’s Gaudi artificial intelligence accelerator failed to meet sales forecasts. The company expected to sell more than $500 million worth of chips in 2024, Reuters reports.

In a conversation with investors, the company’s CEO Pat Gelsinger said that the slow sales growth was due to software. In addition, sales were hurt by the transition from the second to the third generation of Gaudi chips.

Despite unmet expectations, the overall positive outlook for the company’s earnings contributed to a 6% rise in the stock. However, even with this increase, the current share price remains 50% lower than in November 2023.

One of Intel’s biggest problems is that the company has not been able to catch up with competitors in the field of artificial intelligence. The already mentioned Gaudi chip is one of the factors. However, the main problem is that the company has not been able to choose a single direction for development in the field of AI.

Gelsinger expected Gaudi to be able to conquer the new artificial intelligence market after the launch of ChatGPT in 2022, which ran on NVIDIA chips. Although projected sales were $500 million, the Intel CEO told other executives that these expectations were too modest. In 2023, Helsinger foresaw a billion-dollar opportunity, but this did not materialize, partly due to a lack of supply contracts from TSMC.

As of January 2024, Intel told investors that it had the opportunity to secure deals worth more than $2 billion for AI chips. In April, Helsinger said that the company would receive $500 million from AI in 2024, but on Thursday, October 31, he retracted this forecast.