![A WOUNDED INTEL BATTLES FOR SURVIVAL IN THE AI ERA A WOUNDED INTEL BATTLES FOR SURVIVAL IN THE AI ERA](https://cdn.magzter.com/1452683312/1729767688/articles/63H3aMPnw1729852561447/A-WOUNDED-INTEL-BATTLES-FOR-SURVIVAL-IN-THE-AI-ERA.jpg)
Gelsinger, who was named CEO in 2021, has essentially bet the company on 18A, a new chipmaking process. He hopes it will position Intel as a viable alternative to Taiwan Semiconductor Manufacturing Co. (TSMC), the world's leading contract manufacturer of chips.
The reason for Intel's struggles is clear: It fell victim to a classic innovator's dilemma-not once but twice. First, early in the 21st century, its preoccupation with producing chips for PCs and data centers led it to miss the smartphone revolution. Then, in the past decade, it missed the emergence of chips designed for artificial intelligence.
Intel rival Nvidia took a type of chip originally designed for the demands of video games, the graphics processing unit (or GPU), and turned it into the workhorse for training and running AI models. Now the generative AI boom has made Nvidia one of the world's most valuable companies, worth more than $3 trillion, compared with Intel's relatively paltry $84 billion.
Gelsinger is racing to reverse Intel's slide by repositioning the company around manufacturing excellence, while also trying to establish Intel as a player in the market for AI chips. Many are skeptical he can pull it off and fear the company may be in permanent decline. Meanwhile, chipmaker Qualcomm has reportedly expressed interest in acquiring Intel in what would be among the biggest tech takeovers ever. At press time, it was unclear if a deal would happen or whether Intel would instead partner with another company for a cash infusion that doesn't involve a buyout.
Intel wound up in such dire straits owing to missteps in its core business for central processing units (CPUs), in which it was once the unrivaled king. Production delays and problems in its own fab facilities have let rival AMD steal significant market share.
This story is from the October - November 2024 edition of Fortune US.
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This story is from the October - November 2024 edition of Fortune US.
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