Intel missed a pivotal chance to invest in OpenAI

Around seven years ago, Intel had the opportunity to invest in OpenAI, a nascent research organisation focused on generative artificial intelligence. Discussions between Intel and OpenAI spanned several months in 2017 and 2018, considering options like Intel acquiring a 15% stake for $1 billion. However, Intel decided against the deal, partly due to then-CEO Bob Swan’s scepticism about the commercial viability of generative AI models.

OpenAI, seeking to reduce its reliance on Nvidia’s chips, saw value in an investment from Intel. Yet, the deal fell through due to Intel’s reluctance to produce hardware at cost for the startup. The missed opportunity remained undisclosed until now, with OpenAI later becoming a major player in AI, launching the groundbreaking ChatGPT in 2022 and achieving a reported valuation of $80 billion.

Intel’s decision not to invest is part of a broader struggle to maintain relevance in the AI age. Once a leader in computer chips, Intel has been outpaced by competitors like Nvidia and AMD. Nvidia’s shift from gaming to AI chips has left Intel struggling to produce a competitive AI product, contributing to a sharp decline in its market value.

Despite its challenges, Intel continues to push forward with new AI chip developments, including the upcoming third-generation Gaudi AI chip and the next-generation Falcon Shores chip. CEO Pat Gelsinger remains optimistic about capturing a greater share of the AI market, but Intel’s journey serves as a cautionary tale of missed opportunities in a rapidly evolving industry.