Intel, once the dominant force in the global chipmaking industry, finds itself grappling with existential challenges after missing two pivotal technology waves: mobile computing and artificial intelligence (AI), CNN reports.
The company’s recent struggles, culminating in the resignation of CEO Pat Gelsinger, have raised questions about its ability to regain its industry-leading position.
In the late 1990s, under the leadership of former CEO Andy Grove, Intel was a giant in the tech world, with its chips powering nearly every PC. Grove’s vision for a future where personal computers became central to daily life proved prescient. However, Intel’s dominance began to falter when it failed to anticipate the rise of mobile devices.
By the time Apple introduced the iPhone in 2007, Intel was already behind. Apple chose ARM, a British chip designer, over Intel for its processors. ARM quickly became the leader in mobile chipmaking, leaving Intel sidelined in the fastest-growing segment of the industry.
A decade later, Intel again missed a critical shift—this time in AI. Nvidia, once a smaller competitor focused on graphics processing units (GPUs), emerged as the key supplier of chips needed for AI applications. As AI development accelerated, GPUs became essential for handling the massive data loads involved in machine learning. Nvidia’s market value has since surged to $3.4 trillion, dwarfing Intel’s $104 billion valuation.
Intel attempted to enter the AI space with its Gaudi accelerator chip, but it failed to capture significant market share. Nvidia CEO Jensen Huang described Intel’s challenge, noting that the rapid evolution of AI technology caught many by surprise.
“This force is so incredible,” Huang said.
He highlighted Intel’s struggle to adapt.
Gelsinger’s tenure, which began in 2021, focused on revitalizing Intel’s manufacturing capabilities. Despite his efforts, the company’s failure to capitalize on AI advancements led to his departure. Intel’s board has appointed interim co-CEOs, CFO David Zinsner and Michelle Johnston Holthaus, to lead the company through this turbulent period.
Intel is also betting on expanding its foundry business, aiming to manufacture chips for other companies, including potential competitors like Apple. This strategy aligns with the Biden administration’s push to strengthen domestic chip production under the CHIPS Act. However, investors remain concerned about the viability of this capital-intensive business.
Analysts believe Intel could still play a crucial role if geopolitical tensions between China and Taiwan—home to chipmaking giant TSMC—escalate. Intel’s US-based manufacturing could become a valuable alternative for companies seeking to reduce reliance on Taiwan.
For now, Intel is focused on becoming leaner and more agile. The company’s interim leadership faces the daunting task of navigating the evolving tech landscape while maintaining investor confidence. Whether Intel can accurately predict and seize the next major technological inflection point remains to be seen.
As technology analyst Angelo Zino put it:
“The odds of them going back to the glory days look very bleak, but they still have a shot—if they can get the next wave right.”
