It looks like Intel is throwing in the towel on Larrabee. After investing hundreds of millions of dollars in development costs and demoing Larrabee at SC09 Intel seems to have given up on Larrabee as a general purpose GPU. They claim that Larrabee will still have a place in the HPC world but that they are abandoning their assault on the desktop graphics market.
When Intel embarked down the path to take on Nvidia and ATI with their Larrabee product line many insiders wondered if Intel had the GPU expertise to compete with Nvidia and ATI. After all this isn't the first time Intel tried to build a GPU and they didn't meet with much success the first time around. While everyone agreed that Intel had deep enough pockets to pull it off, the main question was were they willing to spend what it would take to be successful. Well it looks like we have the answer... No.