In another lifetime, Intel was the world’s chip leader. Then came the rise of 3D graphics cards, followed by cellphones, and then came AI. Intel watched as its chip dominance frittered away as Qualcomm and ARM began supplying chips for phones that were as powerful as desktop computers. The rise of AI repurposed graphics cards for training models and made Nvidia a household stock symbol.

Windows-Intel Used to Be Everything

If you opted for an AMD processor instead of Wintel, you were a geek. The combination symbolized computing dominance. Now, Intel has been relegated to providing desktop computer chips and cheap graphics processors for cheap computers.

Microsoft announced a plan to change all of that in a deal with Intel to manufacture Microsoft processors for Microsoft products. This news follows Microsoft’s $13 billion investment in OpenAI and the rise of ChatGPT. Microsoft will invest $15 billion in Intel to use its foundries to manufacture M-Chips (my phraseology). Odds are these chips will be used for AI applications.

Microsoft is following the same plan Apple and others have followed with success. Apple’s M-class processors are ARM-based processors manufactured at TSMC. We can count on seeing Microsoft chips in surface devices soon.