Remember brands like Remington and Olivetti? Or, if you’re under 30 years old, it’s better to ask, have you ever heard of these brands? Chances are you haven’t yet heard of them or seen the typewriters they used to make. Thus hangs the story of how great brands can emerge and disappear as the shifting sands of technology tear companies apart and create new winners and losers.

As the artificial intelligence (AI) revolution sweeps the world of finance, business and more, it’s best to uncover the moral of the story before telling that story: it’s better to disrupt yourself and feel some profitable pain than to be rudely disturbed by forces beyond your control.

The chips are down for Intel. The chipmaker has been steamrolled by the rise of Nvidia in an AI boom. It calls for a Bollywood-style throwback to the days when Intel steamrolled Texas Instruments (TI) and Motorola, the world’s early integrated circuit (IC) makers.

After all, the elephant couldn’t dance

Intel reminds one of Guru Dutt’s semi-autobiographical classic, Kagaz Ke Phool (Paper Flowers) where a filmmaker falls on bad days after a phenomenal period. The chipmaker that fell for Nvidia’s boom could have learned a lesson or two from IBM, whose famous ability to adapt was captured in a book titled Who says elephants can’t dance? The writer, Louis Gerstner Jr., was IBM’s CEO during a tumultuous period of restructuring.

To understand the forces behind such change, it is best to remember two things: some technology changes may look like extensions of an old one, but are in fact epoch-making paradigm shifts during which what we end up with is not an improved product but an entirely new one category of products or services that lead to the emergence of new brands that often kill established leaders.

IBM used to dominate the market with large mainframes and proprietary software inside until the 1980s. But it included computer brands such as Compaq so that smaller computers could be made “IBM compatible” to increase penetration and reach in a huge market. Later, it embedded Microsoft’s famous disk operating system software. DOS, which later gave rise to Microsoft’s Windows OS, refers to several closely related operating systems that dominated the IBM PC-compatible market between 1981 and 1995 as PCs (personal computers) replaced typewriters, including short-lived electronic typewriters worldwide. The PC revolution was made possible by “Intel Inside” microchips; the “Wintel” (Windows + Intel) combination overshadowed Apple’s Mac as the planet’s ubiquitous desktop computer, and later, increasingly networked laptops.

How IBM and Microsoft were doing

A close look would show you that while IBM and Microsoft successfully reinvented themselves, Intel never got there. The current AI revolution has left it in a tough spot in the semiconductor stakes in a reversal of fortunes from its PC revolution days.

The writing is on the wall for industry watchers and insiders alike, as AI has only taken off: Don’t miss a paradigm shift (framework) that will shape a new ecosystem for the improvement of the old product line. New age partnerships, services, regulations and laws will dramatically change the landscape that would require industry giants to dance innovatively or sweat like bees.

Olivetti and Remington were typewriter brands killed by the advent of computers. As a result, you rarely hear about careers or job titles like “stenographer” at a time when computer scientists and software engineers are carving out new career horizons. In fact, even software engineers are threatened by AI models, much like basic writers or graphic designers. You have to get better at the old game, and also learn how to play the new game to be on top of the situation.

IBM, which has since sold its PC business to China’s Lenovo, now focuses on providing hybrid cloud computing and artificial intelligence (AI) solutions to businesses, while Microsoft, which once made PC software, is today a pioneer through its difficult but fruitful partnership with OpenAI, whose ChatGPT chatbot generates human conversational responses to user questions.

Declining numbers

Market numbers clearly reveal how Intel has fallen, reminding one of brands like early smartphone maker Nokia and web content company Yahoo, both of which failed to respond adequately to revolutionary changes in technology-driven ecosystems.

Apple, like IBM and Microsoft, has embraced change well and actually generated new categories that keep its brand alive. It has shifted from Mac (computer) to iPod (music player) to iPhone (smartphone with content ecosystem) to Apple Watch (laptop).

Nvidia has stolen what could have been Intel’s thunder if only the Windows-era giant had discovered a new AI threat and turned it into an opportunity. Intel’s 12-month revenue through June 2024 was up just 1.99% to $55.11 from $54.22 billion, while Nvidia Corporation’s 2024 revenue of $60.9 billion was up 126% from the previous year’s 26, 97 billion USD.

The market capitalization of these two corporate brands shows the contrast between growth and decline, even though their annual revenues are comparable in absolute terms. Intel’s market value on the stock exchanges is $104.4 billion, while Nvidia stands at $3.61 trillion. The market value of Nvidia is now about 35 times that of Intel. Let it sink in.

A Tech-Tonic Shift

New data centers embrace Nvidia’s AI-powered microchips favored by cutting-edge users and gaming industries. Intel’s data center revenue is down. While Intel fronts the music, Nvidia, formerly a graphics processing unit (GPU) maker that played second fiddle to Intel in the PC era, is now a leader in the AI ​​age. Cloud giants such as Amazon Web Services and Microsoft Azure are among its partners as critical AI infrastructure grows in size and scale.

Intel is an elephant that could not learn the steps required to dance. The tectonic industrial shift shows how AI is a bus that cannot be missed. It should be better seen as a new category that creates a new ecosystem that needs to be understood from the ground up. It’s a leap, not a jump.

The good news is that AI is also creating new opportunities. That would be another story.

(Madhavan Narayanan is a senior editor, writer and columnist with more than 30 years of experience, having worked for Reuters, The Economic Times, Business Standard and Hindustan Times after joining the Times of India Group.)