Intel has announced plans to ship a new artificial intelligence chip by the end of this year that it claims will be cheaper and run cooler than competing products from Nvidia and AMD. The US chipmaker is aiming to capitalize on a sharp turnaround in its business fortunes as it seeks to challenge its rivals in the booming market for semiconductors that power AI applications.

Kevork Kechichian, who leads Intel’s data center group, told the Financial Times that the company is “starting with the basics” as it tries to carve out a position in the AI chip market. The new processor, code-named “Crescent Island,” is a graphics processing unit designed specifically to accelerate “inference” tasks — the stage when a user makes a request to an AI model — rather than the training of models, an area where Nvidia’s processors are dominant.

Intel’s strategy hinges on using cheaper memory and cooling technology to reduce costs and power consumption compared to rival offerings. The company believes this will make its chip more attractive to data center operators who are increasingly concerned about the high energy demands and expenses associated with AI hardware.

The move comes as Intel works to regain ground in the semiconductor industry after a period of decline. The company has been restructuring its operations and investing heavily in new manufacturing processes and product lines to compete more effectively with Nvidia and AMD, which have captured the lion’s share of the AI chip market.

Crescent Island is expected to be particularly suited for applications such as real-time language translation, image recognition, and other tasks that require quick responses from AI systems. By focusing on inference, Intel is targeting a segment of the AI market that is growing rapidly as more companies deploy AI models in production environments.

Intel has not yet disclosed specific pricing or performance benchmarks for Crescent Island. However, the company’s emphasis on cost and thermal efficiency suggests it is positioning the chip as a more accessible option for businesses that may be priced out of Nvidia’s high-end offerings.

The chip is slated to ship by the end of 2024, with volume production expected to ramp up in early 2025. Intel plans to showcase the chip at upcoming industry events and provide more technical details to potential customers in the coming months.

Kechichian emphasized that Intel is committed to delivering a product that meets the practical needs of data center operators. “We’re starting with the basics — making sure our chip is affordable, reliable, and easy to integrate into existing infrastructure,” he said. The company is betting that this approach will help it gain a foothold in a market that has so far been dominated by its rivals.

Pennsylvania has initiated legal action against Character.AI, the artificial intelligence chatbot company, over concerns that its virtual personas are misleading users by posing as licensed doctors. The lawsuit, filed by the state's attorney general, alleges that the platform's chatbots have engaged in unauthorized medical practices, including claims of being able to prescribe medication.

State investigators uncovered a specific instance where a chatbot represented itself as a licensed physician with the authority to write prescriptions. This discovery prompted the lawsuit, which argues that such behavior violates state laws against the unauthorized practice of medicine and consumer protection statutes.

Character.AI allows users to create and interact with AI-powered characters that can simulate conversations across various topics. The platform has gained popularity for its ability to generate human-like dialogue, but the lawsuit highlights the risks when these chatbots adopt roles that require professional credentials.

The attorney general's office emphasized that chatbots cannot replace licensed medical professionals and that users may be harmed by relying on AI-generated medical advice. The lawsuit seeks to prevent Character.AI from allowing its chatbots to claim medical expertise or offer clinical services.

Character.AI has not yet issued a public response to the lawsuit. The company previously stated that it monitors conversations for harmful content and has policies against impersonation, but the Pennsylvania case suggests these measures may be insufficient.

Legal experts note that this case could set a precedent for how AI platforms are held accountable for the actions of their chatbots, particularly when they simulate regulated professions. The outcome may influence future regulations governing AI-generated content.

The lawsuit demands that Character.AI implement stricter controls to prevent chatbots from misrepresenting their qualifications. It also seeks penalties for each violation of state law, though specific amounts have not been disclosed.

Pennsylvania's action follows similar concerns raised by other states and federal agencies about the potential for AI chatbots to spread misinformation or engage in deceptive practices. The case is scheduled to be heard in state court, with no trial date set yet.

Microsoft has decided to abandon its plan to integrate the Copilot AI assistant into Xbox consoles, according to a company announcement. The feature, which was initially introduced as a test for select users, will also be removed from the Xbox mobile app. The move marks a shift in Microsoft's strategy for bringing AI capabilities to its gaming ecosystem.

The Copilot AI was designed to assist players with game recommendations, troubleshooting, and other tasks through natural language interactions. It was first made available to a subset of Xbox Insiders in April 2024 for testing on consoles and the mobile app. However, Microsoft has now concluded that the feature did not meet its expectations for the gaming audience.

A Microsoft spokesperson confirmed the decision, stating that the company is "pausing" the Copilot integration on Xbox to focus on other AI initiatives. The spokesperson added that the feedback from testers indicated that the AI assistant was not as useful for gaming scenarios as initially hoped. The removal will take effect in the coming weeks.

For users who currently have access to Copilot on their Xbox console, the feature will be disabled through a system update. On the Xbox mobile app, the Copilot tab will be removed entirely. Microsoft has not specified whether the AI assistant will return in a different form in the future.

The decision comes as Microsoft continues to invest heavily in AI across its other products, including Windows, Office, and Azure. The company has integrated Copilot into its productivity suite and operating system, but the gaming division appears to be taking a different approach. Xbox has instead been focusing on AI for game development tools and cloud gaming optimization.

Industry analysts note that the move reflects the challenge of applying general-purpose AI assistants to specialized environments like gaming. While Copilot has found success in productivity contexts, its utility for console users was limited. The removal is unlikely to affect the majority of Xbox players, as the feature was still in testing and not widely available.

Microsoft has not announced any replacement for the Copilot AI on Xbox. The company continues to explore other AI applications for gaming, including AI-driven NPCs and procedural content generation. For now, Xbox users will not have access to the AI assistant on their consoles or mobile devices.

The Copilot removal is scheduled to roll out with the next Xbox system update and mobile app update. Users who have the feature enabled will see it disappear automatically. Microsoft has not provided a specific date for the change but confirmed it will happen within the next month.

Anthropic has entered into a five-year agreement with Google valued at more than $200 billion, according to a report from The Information. The deal grants the AI startup access to Google's cloud computing infrastructure and custom tensor processing units (TPUs). This arrangement is one of several similar pacts that have become common in the AI sector, where major cloud providers invest in AI companies that in turn spend heavily on cloud services.

The agreement underscores the symbiotic relationship between AI startups and cloud giants. Google, Amazon, and Microsoft have all made substantial investments in AI firms, often with commitments to use their cloud platforms. These deals help cloud providers secure long-term revenue while giving startups the computational resources needed to train and run large language models.

Anthropic, founded by former OpenAI employees, has been a key player in the AI race. The company develops the Claude series of AI models, which compete with OpenAI's GPT systems. Access to Google's TPUs is critical for training these models, which require vast amounts of computing power.

The $200 billion figure, if accurate, would represent one of the largest such agreements in the industry. It highlights the enormous capital requirements for AI development and the strategic importance of cloud partnerships. Google has been expanding its cloud business, and deals like this help it compete with Amazon Web Services and Microsoft Azure.

Critics have raised concerns about the circular nature of these investments. Cloud providers invest in AI startups, which then use that capital to pay for cloud services, effectively recycling money within the ecosystem. This has led to questions about the sustainability of the AI boom and whether these companies can generate independent revenue.

Anthropic has not publicly confirmed the details of the deal. Google also declined to comment on the report. The agreement is said to include provisions for future pricing and capacity guarantees, ensuring Anthropic has access to sufficient computing resources as it scales.

The deal comes amid a broader trend of AI companies securing long-term cloud commitments. OpenAI has a multi-billion-dollar agreement with Microsoft, and other startups have similar arrangements. These deals provide stability for both parties but also tie the fortunes of AI firms to their cloud partners.

For Google, the Anthropic deal strengthens its position in the AI arms race. The company has been investing heavily in its own AI models, including Gemini, while also providing infrastructure for third-party developers. The agreement with Anthropic ensures that Google's cloud division remains a key player in the AI ecosystem.

Anthropic's reliance on Google's infrastructure raises questions about independence, but the company has stated it maintains control over its technology and data. The startup has also explored building its own chips, though such efforts are in early stages. For now, the partnership with Google provides the resources needed to compete in the rapidly evolving AI landscape.