Intel, once the leader in chip manufacturing, is now in serious crisis after missing out on opportunities in AI, while Nvidia has reached a record market cap of $3 trillion.
Intel Crisis
Missed Opportunities
Nvidia's market value has now crossed the $3 trillion mark. This event highlights the serious challenges facing Intel.
AI strategy errors
Intel made a number of strategic miscalculations in the field of artificial intelligence. In particular, in 2017-2018 the company refused the opportunity to invest in the then little-known OpenAI. Former CEO Bob Swan believed that AI technologies are still far from mass application.
Current situation of Intel
Today the situation for Intel is so difficult that rumors have appeared about a possible takeover of the company, in particular Qualcomm side. Intel is experiencing one of the most serious crises in its half-century history.
Anti-crisis measures
To overcome difficulties, Intel is forced to resort to radical measures. The company announced it was laying off thousands of employees, suspending dividend payments and restructuring its business. In September, it announced plans to separate its chip production and design divisions, as well as suspend the construction of some factories.
Financials
The contrast with Intel's past success is especially noticeable when compared to 2020, when the company's market capitalization reached 290 billions of dollars. Intel shares have fallen 60% this year, reflecting the scale of the problems facing the tech giant.
Glossary
- Nvidia is an American company specializing in the development of graphics processing units and systems on a chip .
- Intel is an American corporation, the world's largest manufacturer of microprocessors.
- OpenAI is a research company in the field of artificial intelligence.
- Qualcomm is an American company that develops and researches wireless communications.
- CEO - Chief Executive Officer, general director of the company.
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Discussion of the topic – Intel missed the chance: Why the purchase of Nvidia for $20 billion in 2005 did not happen
The article reveals Intel's missed opportunity to acquire Nvidia for $20 billion in 2005 and the consequences of this decision for both companies in the context of the development of the AI market.
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Liam
Wow! Nvidia is now worth $3 trillion! 🚀 And Intel missed the chance with OpenAI. I wonder how history would have turned out if they had invested then?
Sophie
Liam, this is truly impressive! But I'm more concerned about the fate of Intel. Layoffs, dividend stops... Looks like they're in serious trouble. Do you think they'll be able to make it out?
Juan
Sophie, I think Intel still has a chance. They are industry giants! Maybe restructuring and separating production will help them focus on innovation. Although the competition is tough now 😅
Liam
Juan, I agree, the competition is crazy. But I'm surprised that Nvidia was able to get so ahead. Their AI chips just blew up the market! 💥 Intel urgently needs to come up with something in this area.
Klaus
Ha! All this hype about AI... Mark my words, it's another bubble. Intel did the right thing by not getting into this swamp. You'll see, soon all this will burst, and the good old processors will be in price again.
Chiara
Klaus, I couldn't agree more! AI is already changing the world, and this is just the beginning. 🌍 Intel needs to adapt, otherwise it risks remaining in the past. Maybe a merger with Qualcomm will give them new impetus?
Sophie
Chiara, interesting idea about the merger! Although that would be quite unexpected. Have you heard about their plans to separate production and design? Maybe this will help them become more flexible? 🤔
Aleksander
Guys, don't you think Intel can bet on quantum computing? This could be their trump card in the fight against Nvidia and others. Although, of course, this is a long-term perspective.