From Chips to Crisis: How Intel Lost its Way While Nvidia Soared
The story of Intel and Nvidia is one of paths crossed and diverged, a parable of American innovation in the 21st century. In the late 1990s, Jensen Huang, a Taiwanese immigrant with a penchant for bold ideas, walked into Intel’s boardroom. Nvidia, the company he co-founded, had just launched its first graphics card. Huang pitched Intel’s executives on a partnership, even a potential acquisition. They demurred. GPUs, they concluded, were a niche product for gamers, not the stuff of strategic importance.
Fast forward to 2024, and Huang stands atop a $3.4 trillion empire, his company’s graphics processing units (GPUs) powering everything from cutting-edge artificial intelligence to high-frequency stock trading. Nvidia, at one point in 2024, became the most valuable company in the world, surpassing even the likes of Apple and Microsoft. Intel, by contrast, is in crisis. Its market value has plummeted to $104 billion, a shadow of its former self. Last month, its CEO, Pat Gelsinger, resigned under pressure, his grand five-year plan to revive the company derailed by a toxic cocktail of investor impatience, geopolitical turmoil, and technical stagnation.
The contrast between Intel and Nvidia couldn’t be starker. Nvidia is the darling of Silicon Valley, the embodiment of America’s capacity for reinvention. Intel, once the titan of semiconductors, is the cautionary tale of how even giants can stumble in an industry that moves faster than the blink of an eye.
The origins of Intel’s troubles are well-documented. By the mid-2000s, the company had fallen behind Taiwan’s TSMC in manufacturing prowess, unable to break past the 10-nanometer chip barrier while TSMC raced ahead to 5nm and beyond. It missed the smartphone revolution entirely and was late to recognize the transformative potential of AI. Huang, meanwhile, was busy turning Nvidia into more than a chipmaker. His GPUs became the essential toolkit for researchers and companies tackling the most complex problems of our age, from training neural networks to simulating climate change.
Even more remarkable than Nvidia’s technological foresight was Huang’s ability to tell a story the markets wanted to hear. At Nvidia’s annual GTC conference, he would appear in his trademark leather jacket, pacing the stage like a tech evangelist, unveiling not just products but a vision of a GPU-driven future. By 2023, Nvidia’s chips were so critical to AI advancements that their demand created a global supply bottleneck. Jensen Huang became not just a CEO but a symbol of Silicon Valley’s future-forward optimism.
Intel’s leadership, by contrast, struggled to convince anyone of its relevance in a post-PC world. Pat Gelsinger, who took the helm in 2021, was supposed to change that. A veteran of Intel’s glory days, he returned with a mission to transform the company into a manufacturing powerhouse, building advanced fabs in the US and Europe to rival TSMC. He secured billions in government funding through the CHIPS Act, casting Intel as the linchpin of America’s effort to reduce reliance on Asian chipmakers. But the turnaround was slow. Investors grew restless. This year, Intel’s share price tumbled 40% while Nvidia’s soared over 200%. The board’s patience ran out.
The irony, of course, is that Intel’s plight is not just its own. For decades, it was the pride of American industry, its processors synonymous with innovation. But the semiconductor sector has shifted. Manufacturing is now dominated by TSMC and Samsung, while Nvidia and AMD lead in design. Intel sits awkwardly in the middle, trying to catch up in both arenas. Its decline raises uncomfortable questions about America’s ability to compete in a field it once owned.
Chris Miller, in his excellent book Chip War, delves into this seismic shift in the semiconductor landscape, laying bare the technological and geopolitical dynamics at play. His book provides a fascinating lens into how countries and companies like Nvidia have revolutionized an industry that is now at the heart of global power struggles.
Jensen Huang, in one of his more philosophical moments, once remarked that “the world doesn’t need another chip company; it needs a new computing paradigm.” Nvidia is inventing that paradigm. Intel, for all its ambition, is still struggling to find its place in it. In this light, Huang’s vision of GPU-driven computing bears a resemblance to that of Steve Jobs, who, with his relentless focus on innovation, transformed entire industries. Huang’s genius, like Jobs’, was in his ability to see what others could not and bring it to life in ways that transformed the world.
In the end, the story of Intel and Nvidia is a reminder that innovation is as much about vision as execution. Huang saw the future in GPUs when Intel didn’t. He turned a niche product into the cornerstone of modern computing. Intel, meanwhile, remains burdened by its past. Whether it can overcome that weight will determine not just its own fate but perhaps the future of American technological leadership. As the next chapter unfolds, the return of Donald Trump to the White House, with his focus on curbing China’s technological rise, might yet be Intel’s saving grace, providing the political momentum needed to reinvigorate the company and restore its position at the heart of global innovation.
