[News] Intel’s Unfulfilled USD 20 Billion Proposal to NVIDIA Reportedly Keeps It out of the AI Boom

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What if the struggling giant, Intel, has not be left out of the AI wave? What if it is able to team up with NVIDIA, the world’s second-largest company by market capital currently? Surprisingly, it used to have the chance. According to a report from the New York Times, former Intel CEO Paul Otellini proposed to acquire NVIDIA for USD 20 billion in 2005, but the board ultimately rejected the idea.

The New York Times report, citing sources familiar with Intel’s boardroom discussions, noted that even at that time some executives believed NVIDIA’s designs could become essential for data centers, which has proven true with the recent boom in AI.

However, the plan to acquire NVIDIA did not materialize, as it would have been Intel’s most expensive acquisition, and there were concerns regarding the purchase.

The report noted that after the board rejected the idea of acquiring NVIDIA, Intel opted to pursue an internal graphics project called Larrabee, led by Pat Gelsinger, Intel’s current CEO. Larrabee was a hybrid that combined graphics with Intel’s PC-style chip design. However, Intel discontinued the development of Larrabee in 2009

In subsequent years, after missing the chance to acquire NVIDIA, Intel purchased other AI companies, including Nervana Systems and Movidius in 2016, as well as Habana Labs in 2019, according to the report. However, none of these acquisitions have come close to matching NVIDIA, which now has a market cap exceeding USD 3 trillion.

The missed opportunity to acquire NVIDIA is not the only instance where Intel struggled to make the right decision in the AI market. According to a Reuters report citing sources, Intel had the chance to invest in OpenAI several years ago, but the investment was ultimately rejected by company executives.

Reportedly, Intel and OpenAI discussed collaboration several times between 2017 and 2018. At that time, OpenAI was still a nascent nonprofit research organization focused on developing relatively unknown generative AI technologies, according to the report in the Reuters.

Recently, according to a report from Wccftech, Intel has stepped away from competing with NVIDIA in AI computing power and the market of training large-scale AI models. Instead, the company is now entering a less saturated segment of the AI market, focusing on its new cost-effective AI accelerator, Gaudi 3.

Read more

• [News] Intel Reportedly Rejected OpenAI Investment, Missing Out on AI Opportunity
• [News] Intel Steps Back from AI Race with NVIDIA, Shifts Focus to Cost-Effective Solutions with Gaudi 3

(Photo credit: Intel)