Not long ago, chipmaker Intel (INTC) landed an unexpected and not entirely welcome accolade as an “AI Laggard” by Melius Research. However, it turns out that Intel could have had a better position in AI than it does right now, a revelation that slapped investors like a trout to the face. It also sent Intel shares down nearly 2% in Wednesday afternoon’s trading. As it turns out, Intel had an opportunity to buy in on OpenAI seven years ago, according to Reuters.
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Back then, OpenAI was nothing more than a modest non-profit research operation, but today, it’s one of the leading forces in AI and the developer of ChatGPT, one of the biggest names in generative AI. For $1 billion, Intel could have owned 15% of OpenAI and could have had more if it agreed to produce hardware at cost.
But Bob Swan, who was CEO at the time, turned down the deal, noting that it was not clear when the generative AI models would actually be fit for public consumption. That made the payback period (the time it takes to make back the money from an initial investment) unclear, and the rest was history.
A Look at Intel’s Severance Packages
With that embarrassment largely behind them, word also dropped about the severance packages that Intel will be offering workers who engage in voluntary retirement. That is actually part of the job cut program announced previously, and it will be on a sliding scale relative to the time served.
Reports noted that Intel employees with over 30 years of service will get 19 months of pay upon retirement, while those with five years of service will get four months. Meanwhile, those with over 10 years will get 10 months’ salary, which is some pretty odd scaling; why someone with 29 years gets 10 months while someone with 30 gets nearly double that is, at best, unclear. Reports also noted that Intel employees will receive access to “support services” like job counseling, though full details are not available.
Is Intel a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on three Buys, 23 Holds, and five Sells assigned in the past three months, as indicated by the graphic below. After a 44.11% loss in its share price over the past year, the average INTC price target of $29.56 per share implies 52.88% upside potential.
