Intel missed a chance to invest $1 billion in OpenAI back in 2017, and that stake could now be worth $12 billion. Was this a fatal error for the tech giant?
Over the past decade, Intel seems to have made some serious missteps in long-term vision, with one of the biggest financial blunders being the decision to pass on OpenAI.
According to Reuters, four sources revealed that during several months in 2017 and 2018, Intel executives discussed various options to work with OpenAI, including buying a 15% stake for $1 billion.
Two sources also said the talks included Intel potentially increasing its stake by another 15% if it provided hardware to OpenAI at a discounted rate.
Sources told Reuters that at the time, then-CEO Bob Swan didn’t believe generative AI models would hit the market soon, so the investment wouldn’t pay off, at least not within Intel’s desired timeframe.
With OpenAI’s current market value estimated around $80 billion, that initial investment could now be worth about $12 billion, not to mention positioning Intel as a leader in generative AI development.
OpenAI reportedly wanted investment to reduce its reliance on Nvidia chips and build its own infrastructure. It seems this potential deal didn’t pan out as hoped, while Intel could have been an early investor in one of AI’s biggest winners, OpenAI is still raising funds externally to design and produce its own AI acceleration hardware.
So, a real opportunity was missed for both sides. While OpenAI has become the darling of AI investment and one of the most talked-about companies recently, reports suggest things haven’t been entirely smooth for the company lately.
Does Intel regret missing out on OpenAI?
It’s said OpenAI currently burns through $700,000 a day running ChatGPT, mostly on Nvidia AI server costs. If Intel had invested early and helped OpenAI develop its own hardware, who knows how things might have turned out.
Intel’s top management seems to have struggled to make the right calls over the past decade. In fact, since current CEO Pat Gelsinger took over, the company hasn’t performed as expected. CPU defects, mass layoffs, canceled shareholder dividends, and production issues have all hit Intel recently, making it hard not to think the company is at a low point in years.
Is Intel’s reign coming to an end?
Intel has long been a seemingly unbeatable tech giant, but it’s facing serious challenges now. Poor long-term planning, missed chances, and bad calls have piled up. Intel might still be a tech powerhouse, but it makes you wonder how many more mistakes it can afford before it ends up stranded on a rocky shore.
