Intel’s dire fate could have been different if the company had invested just once.
In 2017 and 2018, the tech company had the opportunity to buy a 15% stake in OpenAI for $1 billion, Reuters reported, citing four people with direct knowledge of the discussions. Additionally, Intel could have bought another 15% stake if it had offered OpenAI its hardware at cost, two of the people said.
OpenAI approached Intel as an investor because it would reduce the startup’s dependence on Nvidia, whose chips have become a mainstay in the AI sector.
But Intel walked away from the deal, partly based on its belief that generative AI models would not gain traction in the near future, leaving the company unable to recoup its investment, according to three sources interviewed by Reuters.
An Intel spokesperson declined to comment on Fortune.
Since then, Intel has struggled to gain a foothold in the red-hot AI sector and its stock has plummeted, losing 58% of its value this year. Meanwhile, OpenAI leads the market after launching its popular AI chatbot, ChatGPT, in 2022. After suffering its worst stock drop in 50 years last week, Intel’s market cap of $84 billion is roughly equal to OpenAI’s most recent valuation of $80 billion.
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Although Intel was one of the world’s leading chip makers two decades ago, the company has failed to properly capitalize on the AI mania that has made rival Nvidia one of the world’s most valuable companies.
For years, Intel has focused its resources on making CPUs, such as those in laptops and desktops, capable of handling AI processes, instead of prioritizing GPUs, graphics chips used in gaming that are more effective at handling the myriad calculations AI requires, Reuters reported. Rivals like Nvidia and Advanced Micro Devices (AMD), on the other hand, have had success working with GPUs, while Intel has largely missed the boat. In the third quarter, Intel will release its Gaudi 3 AI chip, which CEO Pat Gelsinger said could outperform Nvidia’s H100 GPUs.
Intel’s earnings last week fell far short of analysts’ expectations, sparking a 26% sell-off in a single day that pushed its market cap below $100 billion for the first time in 30 years. Gelsinger told employees last week that the company will cut 15% of its workforce, or about 15,000 jobs, in a major cost-cutting effort.
“Simply put, we must align our cost structure with our new operating model and fundamentally change the way we operate,” Gelsinger wrote in the memo.
Intel’s rejection of the OpenAI investment mirrors other missed opportunities by giant companies that failed to see the future clearly. In 2000, Blockbuster famously turned down an offer to buy a fledgling Netflix for $50 million. The streaming company is now worth more than $250 billion. During the tech boom of the late ’90s, Yahoo turned down an opportunity to buy Google for $1 million.
This story originally appeared on Fortune.com