Bill Gates Says Intel Has “Lost Its Way” as Rivals Surge Ahead in Chip Innovation

Tech billionaire Bill Gates has expressed concern over Intel’s declining dominance in the semiconductor industry, stating that the company has fallen behind in both chip design and fabrication.

In a recent interview with the Associated Press, the Microsoft co-founder – who has long had ties to Intel – said he was “stunned” by the company’s struggles. He recalled how Intel co-founder Gordon Moore always ensured the company remained at the forefront of technology but noted that those days seem to be in the past.

“Intel basically lost its way,” Gates said. “They are kind of behind in terms of chip design and kind of behind in chip fabrication.”

Intel’s Troubles and the Rise of Competitors

Once the undisputed leader in microprocessor technology, Intel has faced delays and setbacks in recent years. The transition from 14nm to 10nm was marred by delays, and the 7nm process also took longer than expected. Meanwhile, competitors like AMD, Nvidia, TSMC, and Qualcomm have surged ahead in chip innovation, capturing market share that Intel has struggled to reclaim.

The company has also faced other challenges, including:

• Losing Apple as a customer after the tech giant transitioned to its own M-series chips.
• Security vulnerabilities that have raised concerns about Intel’s hardware.
• Raptor Lake issues, affecting the performance of its recent processors.
• Declining financial performance, leading to the exit of CEO Pat Gelsinger last year.

Missing the AI Revolution

One of Intel’s biggest missteps, according to Gates, is that it failed to capitalize on the AI chip boom – an area where companies like Nvidia and AMD have made major strides.

Despite Intel’s struggles, Gates acknowledged Gelsinger’s efforts to turn the company around, saying: “I thought he was very brave to say, ‘No, I am going to fix the design side, I am going to fix the fab side.’ I was hoping for his sake, for the country’s sake, that he would be successful.”

The Road Ahead for Intel

Intel still holds a majority share among Steam gamers, with 63% of users running Intel CPUs according to recent surveys. However, AMD continues to dominate in retail sales, particularly on platforms like Amazon.

There have also been rumours of a potential buyout, with Broadcom once considered a possible suitor. However, the massive investment required to revamp Intel’s fabrication plants—running into tens of billions of dollars – makes a takeover less appealing.

Despite its challenges, Intel remains a key player in the U.S. semiconductor industry, with significant government funding backing its operations. While the path to recovery looks difficult, Gates hopes Intel can regain its footing, though he acknowledges the company is in a tough position.