After rejecting Apple, did Intel make another foolish move? Missed the opportunity to acquire 15% stake in OpenAI seven years ago

Author: Li Dan

Source: Hard AI

When people mention the "backer" behind OpenAI, the first name that comes to mind is Microsoft. Who would have thought that as early as seven years ago, Intel had the opportunity to invest in OpenAI, but this veteran chip giant missed the chance to lay out in the emerging field of artificial intelligence (AI).

On Wednesday, August 7th, Eastern Time, media cited sources familiar with the matter as saying that about seven years ago, Intel had the opportunity to acquire shares of OpenAI. At that time, OpenAI was just a fledgling non-profit research organization dedicated to the field of generative AI, which was relatively unknown at the time.

The sources revealed that in the months of 2017 and 2018, executives from Intel and OpenAI discussed various possible options, including Intel buying 15% of OpenAI for $1 billion, or Intel selling hardware to OpenAI at cost to obtain an additional 15% stake in OpenAI. However, Intel ultimately decided to abandon the deal. OpenAI was interested in Intel's investment because it would reduce OpenAI's reliance on Nvidia chips and allow OpenAI to build its own infrastructure.

The sources disclosed that Intel's decision to ultimately reject investing in OpenAI was partly due to then-CEO Bob Swan's belief that generative AI models would not enter the market in the near future, so Intel's investment would not yield short-term returns. Another reason was that Intel's data center division did not want to produce products for OpenAI at cost.

Regarding the above news, Intel's spokesperson, Bob Swan himself, and OpenAI all declined to comment. Alexei Oreskovic, a veteran tech industry reporter with over two decades of experience and a tech industry editor at Fortune, commented that Intel's refusal to invest in OpenAI reminded him of Intel's previous refusal of Apple's request to supply processors for the iPhone, a mistake that caused Intel to miss the opportunity to transition into the mobile field. Surprisingly, Intel made a similar mistake in the AI field.

Former Intel CEO Paul Otellini revealed in a 2020 media interview that when he took office, Intel refused to supply iPhone chips because, before the iPhone was launched, no one could foresee the future of the iPhone, and Apple's purchase price for iPhone chips was significantly lower than Intel's cost expectations.

Although hindsight is 20/20 when it comes to reviewing decisions, if the report on Wednesday is true, Intel could have cooperated with OpenAI two years earlier than Microsoft, secured AI chip orders, and not be struggling now to compete with Nvidia. The stark contrast between Intel and Microsoft in seizing the significant opportunity to invest in OpenAI is evident. Microsoft's leadership's foresight is evident.

Public information shows that Microsoft invested $1 billion in OpenAI in July 2019, followed by an additional $2 billion investment in 2021. In December 2022, after OpenAI gained fame with the chatbot ChatGPT, Microsoft further increased its investment by $10 billion in January last year.

An internal email from Microsoft in 2019, exposed at the end of April this year, revealed that Kevin Scott, the Chief Technology Officer and AI Executive Vice President of Microsoft, had sent an email to Bill Gates and Microsoft CEO Nadella warning that Google was far ahead in AI. Scott cautioned that without investing in OpenAI, Microsoft might never catch up. Shortly after sending that email, Microsoft announced a $1 billion investment in OpenAI.

Wall Street News once mentioned that as a traditional tech giant, Microsoft, with just a $13 billion investment, deeply integrated the most advanced AI technology into almost all products through a dual deep binding of technology and ownership with the most promising and powerful AI startup company. In just five years, Microsoft effortlessly took the lead in the era and achieved dominance, a move significant enough to be recorded in the textbook of corporate transformation