Ex-Intel CEO Pat Gelsinger said that Nvidia — one of Intel’s top foes — is doing two things well to stay ahead of the competition.
Gelsinger said Nvidia’s cofounder and CEO, Jensen Huang, has figured out how to execute well and build a competitive advantage around his artificial intelligence products. Gelsinger was speaking about Nvidia on an episode of Yahoo Finance’s Opening Bid released on Monday.
“They are executing well,” Gelsinger, who led Intel until December, said. “At the end of the day, Jensen is on it — driving his teams to stay in the front end.”
Gelsinger said that Nvidia has managed to “run hard to stay in the front” in the silicon AI accelerator market. The market for AI chips made by Nvidia, Intel, and others has boomed because of huge spending from big companies and the explosion of AI startups.
“I can’t throw a rock right without hitting a new AI startup in the Bay Area,” Gelsinger said.
The second thing Nvidia has done well is build “meaningful moats,” Gelsinger said. In business, a moat refers to a sustainable advantage that protects a company from competition.
Gelsinger touted Nvidia’s moats on products, including NVLink, a technology that lets multiple GPUs connect within a server, and CUDA, which speeds up computing applications by using GPUs.
Generative AI explosion
Gelsinger worked at Intel for 30 years before he left the company for executive roles at Dell and VMware. He returned as Intel’s CEO in 2021 and abruptly left in December. He is now a general partner at the venture capital firm Playground.
Intel was Silicon Valley’s dominant chipmaker in the 2000s. But it lost ground to Nvidia, Samsung, and several Taiwanese and American players, missing out on key tech developments like the rise of the iPhone and, more recently, skyrocketing artificial-intelligence demand. Companies such as Microsoft and Google have been designing their own chips, further limiting Intel’s customer base.
Intel’s share price dropped almost 50% in 2024 as the company faced challenges, including billions of dollars in losses. Gelsinger responded with sweeping layoffs and buyouts.
The US chipmaker’s new CEO, electronics veteran Lip-Bu Tan, took over operations in March and acknowledged Intel’s recent shortcomings in his first public appearance as CEO.
“We had been too slow to adapt and to meet your needs,” Lip-Bu Tan said about customers on Monday at an Intel event in Las Vegas. “You deserve better, and we need to improve, and we will. Please be brutally honest with us.”
Intel’s stock is down 22% in the past month.