Intel has announced Crescent Island, a specialized AI inference GPU based on the Xe3P architecture, designed to compete in the growing AI hardware market.

Unveiled at the 2025 OCP Global Summit, Crescent Island targets data centers with customer sampling beginning in late 2026 and full release in 2027, emphasizing performance per dollar and token economics.

The GPU is optimized for inference workloads, supporting diverse data types and featuring high memory capacity with energy-efficient LPDDR5X, aiming to enable rapid, cost-effective AI inference.

Built for air-cooled data centers, Crescent Island focuses on power, cost, and inference-specific performance, particularly for large models and continuous token streams.

Intel's strategy includes a co-design approach with open-source software, integrating hardware, software, and orchestration layers, and collaborating with the Open Compute Project.

The architecture supports one or two GPUs, with ongoing improvements to Linux driver support and integration into broader initiatives like Project Battlematrix.

Early prototypes are already available, with planned sampling for late 2026, signaling rapid development progress.

Intel has partnered with Nvidia, which invested $5 billion for about a 4% stake, potentially fostering collaboration in data center and PC chip development.

Despite the competitive AI hardware landscape, industry analysts see Crescent Island as a strategic move to democratize AI inference, lowering barriers for deploying large language models.

Market analysts' one-year price targets for Intel suggest some uncertainty, with an average target of around $26.73 and a broad range, reflecting mixed outlooks on future valuation.

While Intel's earnings estimates for 2025 remain unchanged, forecasts for 2026 have declined, and the stock currently holds a Zacks Rank of #3 (Hold), though it has outperformed the industry with a 62.3% stock increase over the past year.

The announcement of Crescent Island and related systems aligns with Intel's broader turnaround strategy, focusing on expanding foundry services and moving beyond core markets.