Chief executive Paul Otellini showed off a prototype of the TerraFLOP processor at the Intel Developer Forum in San Francisco. The chip features 80 processor cores, each running at 3.1GHz.
It delivers a combined performance of more than one teraflop and has the ability to transfer terabytes of data per second, Otellini claimed. A production model of the chip is scheduled for availability by 2010.
"This kind of performance for the first time gives us the capability to imagine things like real-time video search or real-time speech translation from one language to another," Otellini told delegates.
The TerraFLOP is required to power what Intel described as the mega data centres needed to deliver online applications.
Intel cited Google and YouTube as examples of providers that will require this level of computing power.
The chipmaker predicted that terra-scale servers will make up about 25 percent of all server sales by 2010.
"We are talking about a fundamental change in the way that the whole computing infrastructure is built," Intel chief technology officer Justin Rattner said in a keynote presentation.
"At the core of that infrastructure will be the future data centre, what we refer to as the mega data centre."
Intel's TerraFLOP processor could be compared to Sun Microsystems' Niagara chip or IBM's Cell processor.
The Cell features eight processor cores and was originally designed for Sony's PlayStation 3 gaming console. Sun's eight-core, 32-threaded Niagara processor targets high throughput applications such as web servers.
The terra-scale data centre requires Intel to create improvements on technologies such as the power supply, input/output speeds between system components and bandwidth within the chip.
Intel is currently developing silicon-based laser technology to increase interconnect speeds.
The chipmaker revealed earlier this month that it had achieved an optical computing breakthrough that will allow it to build lasers using a regular chip manufacturing process.
A group of 25 of these lasers will be able to deliver one terabit of throughput, Rattner said.
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