Intel’s former CEO, Pat Gelsinger, recently admitted to a significant misstep during his tenure at the company – underestimating the impact of AI. This oversight has now been deemed a major reason why Intel struggles to keep up with competitors in the AI space. Despite years of development, Intel has yet to present a truly competitive AI solution, particularly in the realms of AI accelerators and rack-scale solutions.
Although Intel released its Gaudi AI accelerators, these products have faced minimal adoption, showing how far behind Team Blue has fallen compared to other players in the industry.
In an interview with Nikkei Asia, Gelsinger candidly acknowledged that during his time as CEO, he misjudged the growing power of artificial intelligence. He noted that while AI chips have continued to improve in computational performance, their power efficiency has stagnated for multiple generations. This stagnation can be traced back to Gelsinger’s early assumptions about the AI market. At the time, he believed inference would be the key area of focus for AI processors, while others like NVIDIA were focused on the more demanding model training. Intel’s unwillingness to shift gears meant that they never managed to produce competitive products in the AI market, despite early boasts about the firm’s readiness.
Intel’s Xeon server CPUs, which Gelsinger called a “multi-decade” product, were perhaps the closest the company came to contributing to the AI sector, but even these were no match for NVIDIA’s dominance. Fast forward to today, and Intel’s struggles are even more pronounced. The company’s promising Falcon Shores project has been canceled, and with new leadership under CEO Lip-Bu Tan, Intel is focusing more on design and less on its costly foundry operations. Meanwhile, NVIDIA and AMD continue to dominate the AI market, raking in hundreds of billions, and Intel is left scrambling just to maintain its existing business.
While Gelsinger still holds firm that maintaining an internal semiconductor manufacturing unit is critical, many critics believe Intel’s ‘IDM 2.0’ strategy has failed. The company is under intense scrutiny as it moves forward with new leadership at the helm. As Intel pivots its focus, the market will likely see drastic changes, but it remains to be seen if those changes will be enough to reverse the company’s fortunes in a rapidly evolving industry.