Semiwiki on LinkedIn Semiwiki on Facebook Semiwiki on Twitter Register / Log in 
Array
(
    [content] => 
    [params] => Array
        (
            [0] => /forum/threads/how-chip-giant-intel-spurned-openai-and-fell-behind-the-times.20901/
        )

    [addOns] => Array
        (
            [DL6/MLTP] => 13
            [Hampel/TimeZoneDebug] => 1000070
            [SV/ChangePostDate] => 2010200
            [SemiWiki/Newsletter] => 1000010
            [SemiWiki/WPMenu] => 1000010
            [SemiWiki/XPressExtend] => 1000010
            [ThemeHouse/XLink] => 1000970
            [ThemeHouse/XPress] => 1010570
            [XF] => 2021770
            [XFI] => 1050270
        )

    [wordpress] => /var/www/html
)

How chip giant Intel spurned OpenAI and fell behind the times

hist78

hist78

Well-known member
"SAN FRANCISCO, Aug 7 (Reuters) - For U.S. chip giant Intel, the darling of the computer age before it fell on harder times in the AI era, things might have been quite different.

About seven years ago, the company had the chance to buy a stake in OpenAI, then a fledgling non-profit research organization working in a little-known field called generative artificial intelligence, four people with direct knowledge of those discussions told Reuters."

"Over several months in 2017 and 2018, executives at the two companies discussed various options, including Intel buying a 15% stake for $1 billion in cash, three of the people said. They also discussed Intel taking an additional 15% stake in OpenAI if it made hardware for the startup at cost price, two people said.

Intel (INTC.O), ultimately decided against a deal, partly because then-CEO Bob Swan did not think generative AI models would make it to market in the near future and thus repay the chipmaker's investment, according to three of the sources, who all requested anonymity to discuss confidential matters."


 
Daniel Nenni said:
Intel did the same thing with Apple. Steve Jobs asked Paul Otellini to make the iProduct chips. Paul said phones belong on desks next to PCs! :ROFLMAO: Old white guy logic. I'm an old white guy so I can say that....... ;)
Click to expand...

People often blame several of Intel's CEOs, past and present, for making critical but wrong decisions that have led to the company's current troubles. In reality, these CEOs are not criminals with evil intentions. They are good people you might be happy to invite to a backyard BBQ or watch a football game with. So, why do they keep making the wrong decisions, especially on such important matters?

In my opinion, it’s due to Intel's business model. Without changing its business model, Intel will continue to make serious mistakes repeatedly, regardless of who is appointed as the next CEO.

I said it in another thread.

"Intel's IDM business model cannot meet the real-world challenges of today and tomorrow. It's Intel's wrong business model that led to wrong strategies, poor decisions, flawed financial practices, misguided product directions, the appointment of an ineffective board of directors, and the hiring of unsuitable CEOs."
Source: https://semiwiki.com/forum/index.ph...foundry-split-to-stem-losses.20883/post-73685
 
Last edited:
Daniel Nenni said:
Intel did the same thing with Apple. Steve Jobs asked Paul Otellini to make the iProduct chips. Paul said phones belong on desks next to PCs! :ROFLMAO: Old white guy logic. I'm an old white guy so I can say that....... ;)
Click to expand...
I think you know that story is apocryphal. I was in Intel at the time and heard the most likely reasoning. Intel did not have spare capacity for even the iPad, and Intel would have had to build additional fab capacity to satisfy Apple's volumes. Several Intel people raised the notion of Apple using the N-1 process, like CPU chipsets did, but I was told Apple was only interested in the N process. And Intel's design tools at the time would probably have needed significant investment to meet Apple's needs. (I don't know if Apple was using licensed IP in their mobile chips back then or not, but if they were using licensed IP it would have needed expensive ports too.) Jobs was also apparently pushing a pricing expectation that would have resulted in margins far below Intel's average gross margins at the time (which were admittedly impressive), so becoming a fab for Apple would have reduced Intel's overall profitability, so the story goes.

It's always easy to second-guess decisions with 20/20 hindsight. As I've posted before, I'm not sure what I would have decided if I was CEO at the time and not Otellini, with the information he had available. The industry was different then.
 
blueone said:
I think you know that story is apocryphal. I was in Intel at the time and heard the most likely reasoning. Intel did not have spare capacity for even the iPad, and Intel would have had to build additional fab capacity to satisfy Apple's volumes. Several Intel people raised the notion of Apple using the N-1 process, like CPU chipsets did, but I was told Apple was only interested in the N process. And Intel's design tools at the time would probably have needed significant investment to meet Apple's needs. (I don't know if Apple was using licensed IP in their mobile chips back then or not, but if they were using licensed IP it would have needed expensive ports too.) Jobs was also apparently pushing a pricing expectation that would have resulted in margins far below Intel's average gross margins at the time (which were admittedly impressive), so becoming a fab for Apple would have reduced Intel's overall profitability, so the story goes.

It's always easy to second-guess decisions with 20/20 hindsight. As I've posted before, I'm not sure what I would have decided if I was CEO at the time and not Otellini, with the information he had available. The industry was different then.
Click to expand...

I heard it directly from Otellini at a Stanford event.
 
You must log in or register to reply here.
Back
Top