Start of a New Era in Computer Technology

Intel’s story began in July of 1968, when Robert Noyce, known as the “Mayor of Silicon Valley” and Gordon Moore, a pioneer in the semi-conductor industry, founded a company together. They didn’t do it in a garage, like many other technology start-ups in that day and age: they started out in a more traditional setting, a laboratory. The pair’s goal was to create innovative technologies that would revolutionise the way people interacted with computers. Noyce and Moore not only brought technical expertise, they fostered a corporate culture based on creativity and entrepreneurial spirit. Intel quickly entered the market for memory chips and rose to become an important player.

One key moment was the release of the world’s first microprocessor in 1971, the Intel 4004. This tiny chip marked the start of a new era in computer technology, as it integrated a central processing unit on a single chip. In the years thereafter, Intel’s success continued with the introduction of numerous groundbreaking microprocessors. The Intel 8008, 8080, and finally the 8086 made huge contributions to boosting computer performance. The 8086 was particularly important, as it laid the foundations for the x86 architecture, which is still used in many PCs and servers to this very day.

The 1990s then saw massive problems with the so-called Pentium chip, which was hit by a processor bug that caused errors. Intel initially tried to play down the problem (saying that it occurred only seldomly and was even then just a minor issue), but its biggest customer back then, IBM, thought differently and paused Pentium sales. However, the real scandal was that Intel had actually known about the bug for a long time, but elected not to publicise it. More than just a few “Pentium jokes” were made back then, for example “When Microsoft is playing football against Intel, it’s 11 Microsoft players versus 10.9999 Intel players.”

After this low point, the company then started to diversify into new business areas in the 2000s. One key decision was the 2015 takeover of Altera, a leading supplier of programmable logic chips (FPGAs). This acquisition enabled Intel to expand its product portfolio and advance into the field of computing centres and the Internet of Things (IoT).

In parallel with this, Intel invested heavily in R&D to press forward in semi-conductor technology. Even now, the company hires the best graduates in technical studies in the USA and houses them in Intel-owned living quarters.

The introduction of processors with smaller and smaller structure widths, such as 14 nm (nanometre) and 10 nm, paved the way for better performance, in conjunction with lower energy consumption. This technological progress was decisive in meeting the rising requirements for computing power and energy efficiency.

Well-Equipped for AI

The rapid development of artificial intelligence (AI) has had a transformational effect on various industries in recent years. Intel has established itself as one of the key players in shaping and supporting AI technologies.

The basis for every AI application is computing power, and Intel has always played a central role in supplying high-performance processors. Even in the early days of the AI revolution, Intel recognised the significance of processors which were optimised specifically for the needs of machine learning and neural networks.

Along with hardware, software also plays a major role in Intel’s AI activities. The company has invested heavily in supporting AI frameworks which enable developers to implement AI algorithms efficiently. It has cooperated closely with various AI frameworks such as TensorFlow and PyTorch, in order to ensure that its processors can be optimally utilised.

Edge Computing for Real-Time Applications

One important focal point for Intel in AI is edge computing. Edge computing refers to processing data directly on the device at the “edge” of the network, instead of having to send all information to a central cloud. This is of crucial importance, in particular for real-time applications such as autonomous driving, intelligent cameras, and IoT devices.

Another exciting business area of Intel is research in quantum computing. Intel has made significant advances in the development of quantum processors, which have the potential to substantially accelerate complex AI calculations.

Fundamentals (as of 26 Jan 2024):

  • Market capitalisation: 202,4 Mrd. USD

  • Employees: 131.900

  • Turnover: 54,23 Mrd. USD

  • Net income: 1,69 Mrd. USD

  • Dividend yield: 1,02 %

  • Price/earnings ratio: 54,2

  • Free float: 99,94 %

Despite Intel’s impressive progress in artificial intelligence, the company also faces challenges. Competition in the industry is intense, and other firms are also investing massively in the development of AI technologies. The challenges range from optimising AI algorithms to finding the answers to ethical questions in relation to the use of AI in various different fields. In particular, keen competition from enterprises such as AMD and NVIDIA in the field of processors and the difficulties in transitioning to smaller structure widths have led to delays and production problems.

Conclusion

Intel has had an amazing journey in the field of artificial intelligence and more is likely to come, from the supply of high-performance hardware and the promotion of software frameworks to the research and development of quantum computing. AI technologies will undoubtably continue to advance, and Intel appears well positioned to play a key role in the exciting future ahead.

Herbert Perus, Sustainability Office bei der Raiffeisen KAG

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Herbert Perus, Sustainability Office, Raiffeisen Capital Investment GmbH

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