About seven years ago, Intel could have invested in OpenAI and bought a considerable share of this young company focusing on generative AI. In 2017 and 2018, Intel explored the possibility of investing in OpenAI.
A Reuters report indicated that Intel considered options such as buying a 15% stake at $1 billion or a bundled deal to supply OpenAI with hardware at cost. According to the report, Swan, the former CEO of Intel, blocked the investment as he did not think that the AI models would penetrate the market in the near future.
Comparing Intel’s position with Nvidia’s AI hardware success
This decision is quite ironic given the success of OpenAI in the subsequent years, more specifically with the release of ChatGPT in 2022. If Intel had collaborated with OpenAI, it would not have needed its competitors, such as Nvidia, to the extent it did. Nvidia has now become one of the most recognized companies in AI hardware, especially with the use of its Graphic Processing Units. On the other hand, Intel has not been able to create much of a landmark in the field of AI.
Intel’s recent results of the AI and Data Centre segment indicate some of the persisting issues. According to the latest earnings report, the company’s Data Center and AI Group (DCAI) saw a decline in both its revenue and operating income.
However, Intel is still moving forward with the Xeon 6 ‘Sierra Forest’ processor going into production and the Xeon 6 ‘Granite Rapids’ CPU being shipped in the near future. Furthermore, Intel’s Gaudi 3 AI accelerators are expected to be deployed in larger quantities later this year, with more than 20 customers identified.
The company has made strategic acquisitions in the past, for instance, acquiring Nervana Systems in 2016 to counter Google’s tensor processing units and the acquisition of Habana Labs in 2019 to boost its AI muscles. Even with these measures in place, Intel’s AI unit has struggled to provide a serious challenge to Nvidia.
Comparing Swan’s operational focus with Krzanich’s strategic acquisitions
However, Intel has not given up on enhancing its position in the AI market, even with such challenges. CEO of the company, Pat Gelsinger, recently stated that the company has a great line of AI chips. Intel is set to release the third-generation Gaudi AI chip and has plans for the Falcon Shores AI chip, which is expected to be released in late 2025. Gelsinger points to expanding customer adoption for these products and a pipeline designed to increase the company’s share of the AI market.
Bob Swan, who was more operational and financially driven during his time at Intel, may have contributed to the company’s failure to adopt OpenAI. Swan served as the company’s CEO between 2018 and 2021.
Swan’s predecessor, Brian Krzanich, oversaw strategic acquisitions that were aimed at boosting Intel’s AI muscle. The acquisition of Nervana Systems was supposed to respond to Google’s AI hardware, but Intel has redirected its attention to the Habana Labs deal and other AI initiatives.
