Tech

Artificial Intelligence, when Intel missed the train by refusing to join OpenAi

Seven years ago, the processor bigwig had a chance to take over 15% of the then non-profit: it dropped the negotiations and missed the AI train

by Finance Review

7 August 2024

2' min read

Key points

OpenAI loses two more managers

2' min read

A sliding door for US chip giant Intel. According to Reuters reports, about seven years ago the company had the opportunity to buy a stake in OpenAI, then a non-profit research organisation working in a little-known field called " generative artificial intelligence.

Over the course of several months in 2017 and 2018, reports the agency, which cites four concordant sources, executives of the two companies discussed various options, including Intel's purchase ofa 15% stake for $1 billion in cash. Negotiations also centred on Intel's acquisition of a further 15% of OpenAI if the big for the start-up at cost.

In the end, Intel decided against the deal, in part because the then CEO Bob Swan did not think that generative artificial intelligence models would come to market in the near future, thus repaying the chipmaker's investment.

For its part, OpenAI was interested in a investment from Intel because it would reduce its dependence on Nvidia's chips and enable the start-up to build its own infrastructure.

Intel's decision not to invest in OpenAI, which then launched ChatGPT in 2022 and is now valued at around $80 billion, is part of a series of unfortunate strategic choices that have seen one of Corporate America's iconic companies, which was at the forefront of computer chips in the 1990s and 2000s, stumble in the age of artificial intelligence. Last week, Intel's second quarter results caused its share price to drop by more than a quarter of its value, on the worst day on Wall Street for the group since 1974: for the first time in 30 years, the company is worth less than $100 billion on the stock market.

OpenAI loses two more managers

Meanwhile, amidst numerous announcements of technological innovations, OpenAI also faces ongoing changes in corporate structure. As reported by The Information, two of the company's key managers have decided to resign, while president Greg Brockman will be absent for a year. The first manager to leave OpenAI is one of its co-founders, John Schulman, who will move to rival Anthropic. The second to leave the company is Peter Deng, head of consumer solutions who had joined OpenAI only a year ago. Deng had previously headed product development at Meta and Uber. Just over a month ago, Apple and Microsoft had turned their backs on joining the board of OpenAI as outside observers.

The new departures follow similar earlier moves. First the departure of Jan Leike, who also joined Anthropic, then that of Ilya Sutskever, the company's chief scientist. Sutskever had supported the dismissal of Sam Altman as a board member, although he later stated that he regretted the choice. As The Information recalls, the manager would never really return to his original duties, relegated to the second row.