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On September 18, Nvidia announced that it would invest US $5 billion in Intel, and the latter's stock price soared 30%. This historic scene is reminiscent of the scene when Nokia was acquired by Microsoft in 2013. In the past, the king received the "blood transfusion" from the upstart, which seemed to be reborn, but his future was still uncertain.
But Intel obviously didn’t want to be another Nokia after missing out on multiple historical opportunities, it finally let go of its once powerful arrogance.
At an online conference with Nvidia founder and chief executive Hu Jintao, Chen Liu said: “This is a historic partnership between the two companies, which I call ‘an opportunity for us to change the rules of the game together’, and we are proud that Nvidia has become an investor in Intel.”
Intel in the past was not so humble, nor did it need such humility. Back 25 years ago, Intel's market value exceeded 500 billion US dollars, making it one of the most valuable technology companies in the world; Nvidia has just gone public, with a market value of less than 10 billion US dollars.
At that time, Intel was like Nokia, which was at its peak in the field of mobile communications. In 2000, Nokia was able to sell seven mobile phones per second, accounting for 70% of the market share, but it bet on the wrong future. In 2007, when Jobs passionately showed off the original iPhone, Nokia's then CEO (CEO) Kang Peikai responded indifferently: "Apple's iPhone will not pose a substantial threat, and no one needs a touch screen."
Intel has also held more than 90% of the market share in the server chip market, and is proud of it and even delighted with it. History is always surprisingly similar, both immersed in the joy of success, without knowing that the crisis has burned the pen.
Looking back, from the “Blue Giant” to the “Copied”, Intel has gone through four striking lessons.
The first was in 2006, when Intel refused to use Apple’s processors and missed the wave of mobility. That year, Jobs also found Intel, hoping that the counterparty could produce a low-power chip for the first generation of the iPhone, shipments of hundreds of millions. The then CEO Paul Odening refused, on the grounds that the business profit was too low. He did not think that the future smartphone shipments would be much larger than the PC.
The second was in 2009, when Intel completely abandoned its early GPU (graphic processor) development and missed the display chip opportunity. It chose to continue to bet on integrated graphics cards and bundle the graphics card with the CPU (central processor). For 10 years afterwards, Intel has not been involved in the GPU field. Until 2018, when Intel announced its return to the GPU market, GPU giant NVIDIA had gone to dust.
The third lesson is that Intel is reluctant to adopt the costly EUV (ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra-ultra
The fourth time was in 2017, when Intel refused to invest in OpenAI and missed the wave of generative AI (artificial intelligence). Today, it seems that there is no better deal: acquiring a 15% stake in OpenAI for $1 billion, and hopefully acquiring another 15% by providing cost-price hardware. Today, OpenAI is valued at more than 500 billion US dollars. Intel is missing not only a "unicorn" company, but also a ticket to a whole round of "computing power revolution". This made Microsoft, which later invested in OpenAI, get a big bargain and suddenly emerge in the field of AI.
When the company’s market value hit $4 trillion, Intel had to admit that it had fallen out of the top 10 in the semiconductor industry due to a strategic mistake.
In the tech industry, there is no eternal ruler, only constant subversion. As Huang Yi said: success is not inevitable, companies are always only 30 days from failure.
Intel’s lesson, in fact, is powerful arrogance. Looking back, the problem is that it was too powerful at first. Because it is powerful, so take the “eye for eye” as the “future trend”, so there is “selective blindness” in the paradigm shift, so it can’t tolerate the “self-depreciation” to embrace the new world. This is the “lock of the strong” – since I’m so strong, why subvert myself? Intel and Nokia have both had a chance to seize the future, but because of pride and missed opportunity.
Stephen Chow said in "Westward Journey": "There was once a love in front of me, but I didn't cherish it." Now, Nvidia has given Intel a chance, or a life-saving straw. How can it give up?
Intel doesn’t want to be the next Nokia.Today, with $9.8 billion in government funding, $5 billion in NVIDIA shares and decades of massive patents, it wants to start again.The core challenge is whether it can really break the path of dependence, get rid of the mind embargo, overcome innovation inertia, and rebuild the technological ecosystem in the AI era.
In this technological revolution, Intel needs to find what was once the most important thing: imagination for the future. Otherwise, no amount of funds will only delay the decline, and it will be difficult for Intel to regain its former glory.