For the American chipmaking giant, market share and growth rate could have been different if the company had made the right choice in the field of AI.
Intel was left behind by Nvdia and AMD in the field of AI. Photo: Bloomberg.
About 7 years ago, Intel had the opportunity to buy shares of OpenAI, then a newly established non-profit research organization operating in the new field of artificial intelligence. For months in 2017 and 2018, senior executives from both sides discussed a number of different options, including Intel’s acquisition of a 15% stake in OpenAI for $1 billion.
They also discussed whether Intel would hold an additional 15% stake in OpenAI if the company produced hardware for startups.
Regretful decision
However, Intel ultimately decided not to implement the deal, because CEO Bob Swan at the time did not believe generative AI models would be on the market in the near future.
OpenAI is interested in the investment from Intel because it will help it reduce its dependence on Nvidia’s chips and allow the startup to build its own infrastructure. According to insiders, the deal also fell through because Intel’s data center unit did not want to produce a non-profit product, Reuters reported.
Intel and OpenAI were close to a partnership agreement. Photo: Incehesap.
The decision not to invest in OpenAI could make Intel executives feel regretful. After OpenAI launched ChatGPT in 2022, the company has experienced rapid growth and is valued at about $80 billion at the moment.
Ignoring the opportunity with OpenAI is one of the strategic “wrong moves” and causes Intel to regress in the AI era. Intel’s unsatisfactory second-quarter earnings caused the stock price to plummet by more than 25% in its worst trading session since 1974.
For the first time in 30 years, Intel’s value is below $100 billion. When asked about the progress of artificial intelligence development, an Intel spokesperson referred to recent comments by CEO Pat Gelsinger and said that the third-generation Gaudi AI chip is expected to launch in the third quarter.
“We are nearing the pace of design technology innovation, and Intel is excited about the product chain it is building to capture a larger share of the AI market in the future,” an Intel spokesperson told Reuters.
Intel is slow in the field of AI
After strong investment from Microsoft and the unexpectedly successful launch of ChatGPT, OpenAI has risen to the top spot in the field of AI. Although missing out on a potential deal with OpenAI is a major setback for Intel, many former senior executives and semiconductor experts argue that the U.S. chipmaker has lost the battle for AI dominance.
“Intel has failed in the field of AI because they have not presented customers with a unified product strategy,” said Dylan Patel, founder of semiconductor research group SemiAnalysis.
Nvidia lags behind Intel in the field of AI. Photo: NurPhoto.
According to four former Intel executives who were involved in developing the plan, the American chipmaker believes that CPUs are like processors that power desktops and laptops. They can efficiently run and process AI models.
However, researchers gradually discovered that GPUs are much more efficient than CPUs at processing data-intensive, which is essential for training large AI models. Since GPUs are designed for game graphics, they can perform a large number of parallel calculations.
Since 2010, Intel has made at least four attempts to produce AI chips, including the acquisition of two startups. However, the company has failed to beat Nvidia and AMD in the AI market, while not yet offering a specific plan to grow in the new field of artificial intelligence.