This format is incredibly similar to Intensity format, except this one trades color depth for the ability to use alpha.
There are three different variations on the IA format:
In this format, each texel takes up two bytes. The first 8 bits represent the color intensity of the texel, ranging from 0x00 (black) to 0xFF (white). The last 8 bits are for alpha, also ranging from 0x00 (transparent) to 0xFF (opaque). Due to both intensity and transparency having 256 different shades, this format only allows for 2048 texels.
In 8-Bit mode, each texel takes up a byte, with the first 4 bits being the color intensity and the last 4 bits being the alpha. This allows for 16 shades of intensity and 16 shades of alpha, giving you 4096 texels to work with.
Much like 4-Bit CI and 4-Bit I, this mode fits in 2 texels into one. In this case, each texel is 4 bits, with the first 3 bits being the intensity, and 1 bit being the alpha (essentially only allowing for alpha to be on or off). This format allows for 8192 texels in total.