Intel, once the undisputed leader of the personal computing and server era, is now in deep crisis as its share price has halved, its artificial intelligence ambitions have faltered, factories sit underused, and tens of thousands of jobs are being cut. The company that helped build Silicon Valley, launching the world’s first commercially produced microprocessor in 1971 and powering IBM’s first personal computer a decade later, allowed complacency and bureaucracy to creep in just as the technology landscape began to shift. By the early 2000s, Intel was one of the world’s most valuable companies, but its dominance masked early warning signs that would later prove critical.
Those problems trace back to a series of strategic errors. In 2007, Intel declined to make chips for Apple’s iPhone, pushing Apple toward Arm-based designs that went on to reshape the mobile industry. Intel also dismissed the importance of extreme ultraviolet lithography, slowing its investment in the very manufacturing technology competitors would later use to overtake it. Through the 2010s, delays in next generation manufacturing processes and a rigid attachment to the x86 architecture left Intel trailing AMD and TSMC; AMD’s Zen-based processors steadily ate into Intel’s market share, while Nvidia pivoted from gaming graphics to artificial intelligence and data centre leadership. Intel missed the mobile revolution altogether as Qualcomm and Apple surged, exposing the company’s inability to adapt.
Pat Gelsinger’s return as chief executive in 2021 was framed as a turnaround, with a bold plan to regain manufacturing leadership through five new process nodes in four years built around the ambitious 18A technology, supported by billions invested in new fabs in Arizona, Ohio and Europe. But the strategy quickly ran into trouble: Intel alienated TSMC with comments about Taiwan’s geopolitical risks and reportedly lost access to discounted production, while early 18A test wafers for Broadcom allegedly saw yields below 20%, far behind TSMC’s performance. Gelsinger further damaged credibility in 2023 by publicly claiming $1 billion in artificial intelligence chip sales even though internal forecasts were half that and supply had not been secured, forcing a later retreat in expectations.
As the artificial intelligence boom accelerated, Intel’s decline became stark. While Nvidia soared to a $3-trillion valuation by powering generative artificial intelligence models such as ChatGPT, Intel’s acquisitions of artificial intelligence startups failed to yield a competitive platform, and its Gaudi accelerators struggled to gain market traction. At the same time, Arm’s architecture, once confined mainly to mobile, moved decisively into desktops and servers, validated by Apple’s high performance Apple Silicon and reinforced by Qualcomm’s Copilot PCs and Microsoft’s decision to rely exclusively on Arm for artificial intelligence PCs. Even AMD is now partnering with Nvidia on Arm-based artificial intelligence chips, underlining a broader industry shift away from x86 that Intel has not matched.
By late 2024, Intel’s financial and strategic crisis had intensified. Its Q3 net loss reached nearly $17 billion, and its share price fell below $20, leading to Pat Gelsinger being pushed out in December without even a continuing advisory role. The board installed veteran venture capitalist Lip-Bu Tan as chief executive, who swiftly moved to unwind much of Gelsinger’s legacy by closing the automotive chip division, scrapping factory projects in Germany and Poland, and declaring that Intel would not pursue cutting edge manufacturing unless there was substantial external demand. Intel has already laid off nearly 40,000 workers in two years and will shrink its workforce by another 10,000 by the end of 2025, underscoring the scale of retrenchment.
Despite these setbacks, Intel still has deep engineering expertise, a powerful brand and considerable manufacturing know-how, but it faces a long and uncertain road back. Its prospects now hinge on finding customers for its planned 14A and 18A nodes, rebuilding investor trust, and presenting a credible roadmap in artificial intelligence and cloud computing as the industry moves toward Arm and specialized accelerators. The chip sector has shifted to a new order in which Nvidia leads in artificial intelligence, Arm underpins the next generation of mobile and cloud systems, and AMD continues to gain ground, leaving Intel to fight for relevance in a market it once defined. For the United States, Intel represents more than a single company; it embodies national security, technological independence and the hope of reviving domestic industry, a hope the article suggests is currently hanging by a thread.
