Intel now faces a fight for its future

Intel is facing a turning point in its nearly 50-year history. Intel CEO Brian Krzanich resigned yesterday, following an ongoing investigation into a past consensual relationship with an Intel employee that violated the company’s non-fraternization policy. It’s a surprise end for Krzanich, who first joined Intel more than 35 years ago, and spent most of his time at the company on the operations side.

Krzanich was appointed Intel CEO five years ago, and was left with the messy task of fleshing out Intel’s mobile strategy and driving the company forward in new markets. Known for PCs and servers, Intel’s business has been disrupted by smartphones and the cloud, and was caught seemingly unaware by the rise of AI and autonomous vehicles. While you might have previously cared about what Pentium processor was inside a laptop with an Intel sticker plastered on it, these days Intel’s relevance has declined. You don’t hear “Intel Inside” anymore or the jingle during commercials, and billions of smartphones don’t rely on Intel processors. Krzanich spent the past five years fighting this decline all while trying to position Intel for the future.

There have been promises of smart buds, Intel-powered smartwatches, smartglasses, an Intel TV service, drones with Intel chips, and self-driving cars, but around 85 percent of Intel’s revenue still comes from its server and PC work. Intel has tried to reposition itself multiple times at CES in recent years with flashy keynotes, but the efforts have been unconvincing and lacked focus.

As Intel’s focus has strayed into other markets, its core business came under attack. While Intel has enjoyed a decade of dominance in PCs and servers, competitors are on the march. Intel typically leads by shrinking its chips faster than competitors and being the first out the door with faster and more capable processors. Under Krzanich’s watch, Intel has struggled to produce 10-nanometer chips, and competitors like AMD have caught up with its Zen architecture for Ryzen and EPYC processors. AMD now competes in both performance and value, and Krzanich recently admitted Intel will even lose server share to AMD this year.

Intel was originally planning to release its 10-nanometer processors back in late 2016, but the company recently delayed that once again to 2019 due to yield issues. It’s the first major stutter in Intel co-founder Gordon Moore’s incredibly accurate Moore’s Law prediction of roughly doubling the number of transistors in its processors every couple of years. Intel is also redesigning its processors to protect against the Spectre security flawsthat were uncovered earlier this year. Once Intel gets production back on track, it faces competition that it can’t pay off PC makers to stem.

asctec firefly drone realsense© Provided by The Verge asctec firefly drone realsense

During Krzanich’s short time as CEO, Intel underwent major restructuring and bailed on the smartphone market. The company canceled its Atom processors that were supposed to compete with Qualcomm’s Snapdragon line, and even signed a deal to produce ARM-based chips in Intel factories. Intel is now focusing on the GPU business, and the future of artificial intelligence.

Intel has hired Apple and AMD veteran Raja Koduri to build graphics chips that it plans tointroduce in 2020. This will be an important push for Intel, as it needs to focus on GPU work for high performance computing, visualization, and AI computing in order to chase the competition. AMD has an entire line of GPUs dedicated to machine learning, and Nvidiacontinues to demonstrate the type of superior AI it can enable. Nvidia and AMD are leapfrogging Intel because unlike traditional processors, GPUs have hundreds or thousands of cores that can each handle recurring calculations over and over again, making them ideal for training AI.

Intel knows it’s behind and it acquired deep learning startup Nervana Systems, autonomous vehicle experts Mobileye, and computer vision company Movidius, which builds the chips that power DJI’s drones. Intel has also invested $1 billion in AI startups, and it unveiled a new family of AI chips to take on AMD and Nvidia last year. Intel’s Neural Network Processor (NNP) is designed to speed up the training time for machine learning models, and the goal of the chips is to improve deep learning training speeds by 100 times by 2020. Intel still needs to show it can catch Nvidia and AMD with this AI and GPU work, though.

a circuit board© Provided by The Verge

Alongside all these chip battles, Krzanich also attempted to reshape Intel’s culture. Intelstrongly opposed the gamergate controversy after it became involved following anadvertising snafu. Intel pledged $300 million to focus on diversity, with Krzanich aiming for a “full representation in all levels” of its workforce by 2020. Krzanich also launched a project to tackle online abuse, and helped push through Intel’s war on conflict minerals.

Intel must now hire a CEO that can make the company competitive in the race for AI, and ensure its traditional chip work doesn’t hit delays that could let competitors eat into its profitable datacenter dominance. Securing Intel’s future growth will be a tough job for Krzanich’s successor.

Intel is in an odd position of market dominance and emerging threats that, in many ways, echos Microsoft’s position before Satya Nadella took over. Intel and Microsoft have followed in each other’s footsteps for decades under the famous Wintel alliance. While Microsoft has diversified its business thanks to the reach of software and its focus on the cloud, Intel has reacted more slowly. Intel now needs to find its own Satya Nadella who has the engineering knowledge to steer the company in the right direction, all while accepting that the company’s consumer relevance doesn’t necessarily matter anymore. If the future is the cloud and AI, Intel needs a strong leader to aggressively guide it there.
SOURCE: Theverge.com
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