How semiconductor juggernaut Intel lagged behind the times by rejecting OpenAI

About seven years ago, the company had the opportunity to buy a stake in OpenAI, then a fledgling nonprofit research organization working in a little-known field called generative artificial intelligence, four people with direct knowledge of those discussions told Reuters.

Four people with direct knowledge of such negotiations told Reuters that the corporation had the potential to acquire a share in OpenAI, a nonprofit research group that was just getting started in the obscure subject of generative artificial intelligence, around seven years ago.

According to three of the sources, officials from the two businesses talked about a number of possibilities over the course of many months in 2017 and 2018, including Intel purchasing a 15% interest for $1 billion in cash. According to two persons, they also talked about the potential for Intel to purchase a further 15% of OpenAI provided it produced hardware for the company at a loss.

Three people who asked to remain anonymous in order to discuss private topics said that Intel finally opted against a merger, partly because then-CEO Bob Swan did not think that generative AI models would reach the market in the near future and so counterbalance the chipmaker’s investment.

Because an Intel investment would have lessened OpenAI’s reliance on Nvidia chips and allowed the business to develop its own infrastructure, the company was intrigued in the proposal. Another reason the contract fell through was that Intel’s data center division refused to provide goods at cost.

Intel’s decision not to invest in OpenAI, which launched the groundbreaking ChatGPT in 2022 and is now valued at about $80 billion, had not previously been made public.

It comes in a series of strategic misfortunes that have seen the company, which was at the forefront of computer chips in the 1990s and 2000s, stumble in the AI era, according to Reuters interviews with nine people familiar with the matter, including former Intel executives and industry experts.