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Intel's $100 Billion Bet Goes Horribly Wrong...What Happened?

Logically Answered

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Intel used to be the most dominant chip maker in the world having conquered the world of PCs thanks to their deal with Windows computer makers. But this deal actually turned out to be their worst nightmare as it led to copious amounts of complacency. The effects of this complacency didn’t show up for decades to come, but in retrospect, it’s extremely obvious. First, Intel missed out on the mobile revolution, having underestimated the adoption of smartphones. Then, Intel started losing CPU market share to AMD after the impressive launch of Ryzen. They bled market share for a couple of years before they completely dropped the ball with GPUs. In a last-ditch effort, Intel decided to bet an extraordinary $100 billion on their in-house foundry business, but this too has fallen flat on its face. This video explains the slow and painful downfall of Intel and how complacency slowly eats away at any company.

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Timestamps:
0:00 - A New Savior
1:21 - IDM 2.0
6:25 - The Early Cracks
9:33 - Bad To Worse
13:21 - Gelsinger Is Out

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20 Comments

@jiasonnelson7391 1 year ago

The moment the company is controlled by investors that only care about short term profits, they are doomed.

@趙新奇 1 year ago (edited)

Seems like the board is the problem to me, when they had their good times, they decided to hire CEO without engineering background, that leads to its downfall, and when they do now, they don’t have the patience to support the guy doing a difficult job

@user-cx2bk6pm2f 1 year ago

The decline started with Otellini, who came from marketing and was their first non-engineer CEO.

@AlxandreNotavo 1 year ago

The sad thing is that Pat Gelsinger was fired due to the bad decisions of past CEO's. His own leadership effects wouldn't be apparent until 2026 or 2027

@jimmy41607 1 year ago

Its board of directors fault , this episode did not dig deep enough there is only one guy in the board of directors who is technical , and the rest of them doesn't know how to make chip

@DavidWadleigh 1 year ago

It wasn't "complacency", it was the typical corporate short-term thinking of tickling shareholder toes by funneling their profits into share buy-backs that did this. Our government incentivizes this by giving them rock-bottom corporate tax rates, paying the corporate executives with stock options incentivizes this, and private equity shareholders incentivize this by only caring about short-term ROI instead of caring about the long-term prospects of the business.

@xgford94 1 year ago

He didn’t fail, the board bottled it . Pat said it would be rough for at least 5years in that speech and the board dropped him in 2?? Just as it’s turning

@halholland1637 1 year ago

American businesses have focused on the short term for too long. This is just another example. Sad!

@digimanga 1 year ago

I can't help but think of that one Redditor guy who invested his entire grandma's inheritance (about $800k) on intel right before they plummeted down to $20 a share

@magburner 1 year ago

Intel thought they could milk the four cores indefinitely.

@CJB3113-t8x 1 year ago

Intel didn't ignore smartphones. They were betting heavily on Blackberry. I was there at the time, and what we were working on, and what was in development were NAND flash and processors for future Blackberry devices.

@kamudankemter 1 year ago

Once the competitive battles are won and easy profits are made, the illusion that the main factor is sales, not engineering, is created, and thus the ability to compete is lost.

@michaelnafari2032 1 year ago

You said it! "Complacency."
I guess they felt that they were too big to fail.

@TreDogOfficial 1 year ago

5:15 wow this guy actually said "produce the production"

@unhinged-menagerie 1 year ago

The first x86 chip was the 8086 released in 1978.

1978 - 8086 (16 bit)
1979 - 8088 (16 bit)
1982 - 80286 (16 bit)
1986 - i386 (first 32 bit x86 processor)
1989 - i486 (32 bit)

@WeedPatch71 1 year ago

Since when was the i486 their first x86 chip? Somebody didn't do their math right. The 8086 was produced in 1978, the 486 didn't come out till 1989.

@ZxZ239 1 year ago

plase just tune down the music a bit

@jgn1977 1 year ago

As a consumer of PC parts for the last 25 years, I have no love lost for Intel. They were gouging people when they were on top and AMD was floundering. They sat back on their success and weren't customer focused and now they can't catch up. Good riddance.