Intel Missed a $100 Billion Opportunity: A $1 Billion Stake in OpenAI?

Intel Missed a $100 Billion Opportunity: A $1 Billion Stake in OpenAI?Around 2017, when OpenAI was still a non-profit research organization focused on generative AI, Intel had the chance to acquire a 15% stake for $1 billion in cash and an additional 15% by manufacturing hardware at cost. However, Intel ultimately abandoned the deal because then-CEO Bob Swan believed that generative AI wouldn't be commercially viable in the short term

Intel Missed a $100 Billion Opportunity: A $1 Billion Stake in OpenAI?

Around 2017, when OpenAI was still a non-profit research organization focused on generative AI, Intel had the chance to acquire a 15% stake for $1 billion in cash and an additional 15% by manufacturing hardware at cost. However, Intel ultimately abandoned the deal because then-CEO Bob Swan believed that generative AI wouldn't be commercially viable in the short term. Today, OpenAI's valuation has soared to $800 billion, and the emergence of ChatGPT has made this missed investment even more glaring, highlighting Intel's struggles in the AI era.

A Missed Investment: Intel's Near Miss with OpenAI

Multiple sources have revealed that Intel and OpenAI engaged in numerous negotiations throughout 2017 and 2018, exploring various partnership options, including Intel acquiring a stake in OpenAI for cash and manufacturing hardware for them at cost. For OpenAI, Intel's investment would have meant reducing their dependence on Nvidia chips and the possibility of building their own infrastructure. Ultimately, Intel abandoned this potential investment, a decision closely tied to the judgment of then-CEO Bob Swan.

Swan believed that generative AI models wouldn't be commercially viable in the short term and couldn't yield a return on investment for Intel. Consequently, Intel's data center division also declined to manufacture hardware at cost, leading to the breakdown of the deal.

Strategic Challenges Behind the Missed Opportunity: Intel Missing the AI Wave

Intel's missed investment in OpenAI is merely a reflection of its series of strategic setbacks in the AI era. The giant that once led the chip industry with the "Intel Inside" slogan is now stumbling repeatedly in the AI wave.

In fact, Intel has been lagging behind in the AI field for nearly a decade. As early as 2010, Intel began its exploration of AI chips, but its numerous attempts have failed to pose a threat to Nvidia and AMD.

Intel's AI Chip Journey: Repeated Failures, Difficulty in Breaking Through

In 2016, Intel acquired Nervana Systems for $408 million, hoping to enter the AI field. Nervana's technology resembled Google's Tensor Processing Unit (TPU), designed specifically for building or training large generative AI models. However, while Nervana's processors achieved some success among certain clients, they ultimately failed to break through Nvidia's market dominance.

In 2019, Intel acquired Habana Labs for $2 billion but shut down the Nervana project in 2020.

Challenges Faced by Intel: Intense Market Competition, Lack of Technological Advantage

Compared to Nvidia, Intel faces enormous challenges in the AI field. Nvidia, thanks to its lead in graphics processing chip technology and its early entry into the AI field, has firmly established itself as the leader in the AI chip market. AMD is also rapidly rising, posing a serious threat to Intel's market share.

Intel's Future: Can it Revive and Return to the Peak?

Whether Intel can revive and return to the peak in the AI era will be a huge test. The company is currently working hard to develop new AI chip products and is trying to improve its competitiveness in AI by collaborating with partners. However, to catch up with Nvidia, Intel needs to make greater efforts and find new technological breakthroughs.

Intel's missed opportunity might be a mirror reflecting the challenges faced by the entire tech industry:

• Tech giants need continuous self-renewal to adapt to the rapidly changing technological environment.

• The development of emerging technologies like AI is incredibly fast, requiring sharper insight and decisive decision-making.

• In the field of innovation, catching up with early movers is difficult, demanding more flexible strategies and stronger execution.

Intel's missed investment in OpenAI might serve as a wake-up call for the tech giant in its AI transformation journey, reminding it of the need for constant self-reflection and adjustment to ensure its competitive edge in the future.