A year ago Intel was left for dead, its stock at a 16-year low. Today, it’s the hottest stock on Wall Street, gaining almost 500 percent over the last year, leading to an all-time peak valuation in its 58-year history—surpassing $600 billion as it secures partnerships with a Who’s Who of tech titans led by Nvidia, Tesla, and Apple.
But nice as it is for shareholders, the stock’s rise isn’t the real story. Intel’s comeback, if it sticks, could be hugely important for geopolitics and for securing America’s economy in the 21st century. Intel is the only American company remotely capable of competing with Taiwan Semiconductor Manufacturing Company (TSMC), its much larger rival in Taiwan. And among the reasons the stock is climbing is that the AI boom has reached a new stage, one where central processing units (CPUs)—the semiconductors that comprise the computer’s “brain”—are suddenly critically important again. Intel has long been a dominant CPU manufacturer.
The AI boom had primarily been built on a different kind of semiconductor known as graphics processing units (GPUs), the graphics chips pioneered by Nvidia. GPUs split AI workloads into thousands of small tasks and work on them all at once. CPUs, built to do tasks consecutively, were considered increasingly irrelevant. “Somewhere along the way, people thought CPUs were dead,” Rene Haas, CEO of UK chip designer Arm, said back in March.