Intel's Missed Opportunity: Why They Rejected Nvidia for $20 Billion

In 2005, Intel's then-CEO Paul Otellini proposed acquiring Nvidia for $20 billion. While that figure seems small compared to Nvidia's current market value of over $3 trillion, it was a significant sum for Intel at the time. However, Intel's board of directors rejected the deal, citing their focus on x86 architecture for PC CPUs.

The Board's Decision

Several board members recognized the potential of GPUs, especially in enterprise and data center markets, but their voices weren't strong enough to sway the board. Otellini, facing the rejection, chose not to push the proposal further.

Hindsight and Intel's History

Hindsight suggests this could have been a defining moment for Intel. However, the board's decision wasn't entirely unfounded. Intel had a history of unsuccessful mergers and acquisitions, and a $20 billion deal would have been their most expensive acquisition ever.

Intel's Mindset

Furthermore, Intel was highly dominant in the market. They were considered a closed-off entity, heavily invested in x86 technology. This mindset might have contributed to their reluctance to acquire a company with a different focus.

Why did Intel's board of directors reject the acquisition of Nvidia?

Intel's board of directors rejected the acquisition of Nvidia in 2005 because they were focused on x86 architecture for PC CPUs. They were hesitant to invest in a company with a different focus, especially considering their history of unsuccessful mergers and acquisitions.

What is the current valuation of Nvidia?

Nvidia's current market value is over $3 trillion.

How did Intel's board of directors view GPUs in 2005?

Some members of Intel's board of directors recognized the potential of GPUs, especially in enterprise and data center markets. However, their voices weren't strong enough to sway the board.

A Shift in Power

Today, the situation has drastically changed. Nvidia's valuation has skyrocketed, surpassing Intel's by a significant margin. Nvidia's strength lies in GPUs, which are crucial for artificial intelligence (AI) development. This has led to Nvidia's immense success, while Intel struggles to keep up.