Paul Otellini, the former CEO of Intel (INTC) reportedly wanted to buy Nvidia for as much as $20 billion two decades ago. However, the Tech pioneer company ended up not following through with the purchase, seemingly missing out on billions worth of investment.
According to a New York Times report, Intel’s former chief executive wanted to buy Nvidia in 2005. At that time, the chipmaker was mostly known for making computer graphics chips. However, Intel’s board did not approve of the $20 billion acquisition. Thus, the purchase never went ahead. Instead, the board was reportedly more interested in an in-house graphics project called Larrabee.
Now, Nvidia has become one of the biggest names in the tech sector, thanks to its computer chips used in AI technology development. The company has a market cap of $3.4 trillion market cap, competing with some of the biggest Mag-7 stocks. Intel, on the other hand, has seen its shares fall around 53% so far this year. The company is now worth less than $100 billion.
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Intel Goes 0 For 2 In Heinsight On AI Investments
Nvidia wasn’t the only current AI powerhouse Intel missed out on investing in. Over a decade after passing on Nvidia, Intel again reportedly decided not to buy a stake in OpenAI. According to a Reuters report, there was interest on both sides in the acquisition. This was before Sam Altman’s AI juggernaut sparked the current AI hype with the release of ChatGPT in November 2022.
Former Intel chief executive Bob Swan didn’t think OpenAI’s generative AI models would come to market soon enough for the investment to be worth it. Hence, Intel missed out on yet another multi-billion investment. All in all, if Intel had purchased both OpenAI and Nvidia over the last 20 years, and AI advanced the way it has in reality, Intel would be competing with the Mag-7 stocks as a major tech giant.
Instead, the company is struggling. In August, INTC shares fell 27% after it missed revenue expectations with its second-quarter earnings. The company also announced layoffs and is expected to have a just-as-rough Q3 report.
