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Intel 64-bit chip gets venture fund

Intel unveils an investment fund of about $250 million to spur long-term adoption of its new 64-bit Merced chip architecture.

Intel along with a consortium of hardware makers and financial institutions have created an $250 million venture capital fund to spur both short- and long-term adoption of its new 64-bit chip architecture.

The Intel 64 fund--which has received multimillion dollar contributions from the chipmaker, Hewlett-Packard, Dell Computer, Compaq Computer, SGI and an investor group managed by Morgan Stanley Dean Witter among others--is geared to encourage start-ups, as well as established companies, to develop software for the "IA-64" bit architecture, said John Miner, vice president and general manager of the Enterprise Server Group at Intel.

Merced, the first Intel IA-64 chip, is due in the middle of next year while its successor, McKinley, will come out toward the end of 2001. Intel chips currently are based around a 32-bit architecture. The 64-bit chip, which will vastly increase the amount of data that can flow through a microprocessor, will compete against 64-bit processors from Sun Microsystems and others.

"This will enable innovative solutions in the application tools and middleware area," Miner said. E-commerce applications will also receive funding, he added.

Fund investments, ideally, will help ameliorate the chicken-and-egg problem that occurs with every new technology generation. By encouraging the development of software, hardware vendors will have an easier time selling pricey Merced server computers to corporate customers. Similarly, the investment reduces the risk inherent in moving to a new architecture.

Also, increasing the momentum behind Intel's architecture will cut the overall cost of products in the marketplace," said Miner, commenting on the dilemma corporate customers face with computer budgets.

"Demand [for Intel-based servers] is growing at exceptional rate, but budgets don't grow at the same rate," he said. Intel chips today are based on 32-bit architectures, but several competitors have 64-bit chips that compete with Intel.

The plan is interesting in light of the fact that many analysts expect a relatively slow adoption for Merced and IA-64. The chips are aimed at high-end corporate computer buyers, who tend to be more conservative. Many expect the Merced chip, in effect, to be a test bed to ensure that software runs on the new architecture. Customers then can move to IA-64 computers when the next-generation McKinley chip rolls around.

Interestingly, the fund will largely be operating system (OS)-agnostic, he added. In fact, no OS vendors are participating in the fund. And, while some sources said that products from the fund may not be ready until after Merced comes out, Intel stated that products encouraged by the fund will be out for the chip's release.

Intel wants IA-64 to be the "unifying platform"--the chip on top of which all operating systems run. In today's world, Microsoft's Windows runs mostly on Intel chips and most varieties of Unix run atop a variety of companies' RISC chips.

Among the operating systems being ported to IA-64 are Sun Microsystems' Solaris, the Monterey system from Santa Cruz Operation, Sequent, Compaq's Tru64 Unix, SGI's Irix, Linux, and of course Windows.

However, because of earlier delays in Merced, HP and SGI have extended their own chip architectures farther into the future, the companies have said.

Michael Kanellos contributed to this article.