Intel undergoes CEO leadership change while Bezos-backed AI chip startups and Amazon accelerate infrastructure buildout
Jeffrey Katzenberg will join Fortune Brainstorm AI next week in San Francisco. The media mogul, a three-time Brainstorm veteran whose last appearance was in 2019, will speak alongside his WndrCo founding partner Sujay Jaswa and Writer CEO May Habib about how AI is transforming storytelling. The event will be livestreamed for those unable to attend in person.
Pat Gelsinger has stepped down as Intel CEO, with his retirement announced with immediate effect. Gelsinger, who joined Intel in 1979 and served as CTO starting in 2001, had returned to Intel as CEO in 2021 after stints at EMC (as president and COO) and VMware (as CEO). His mission was to separate Intel's legacy chip-design business from its manufacturing side and establish a sustainable foundry business, but the company has failed to make that division profitable and has fallen behind in the AI chip race. Intel recently announced job cuts and the freezing of key factory build-outs, and Gelsinger appears to have been forced out by a board frustrated with his pace of progress. David Zinsner and Michelle Johnston Holthaus are now interim co-CEOs, with a permanent replacement—or possibly a buyer—being sought. Meanwhile, Amazon founder Jeff Bezos has joined a $700 million funding round for Tenstorrent, a Toronto-born, Silicon Valley-based AI chip startup aiming to compete with Nvidia. The round included investments from South Korea's AFW Partners, Samsung Securities, LG Electronics, Fidelity, Hyundai Motor, Canada's export credit agency, and a major Ontario pension fund. The funding will be used to hire engineers, purchase computing equipment, and expand the global supply chain, with TSMC and Samsung expected to manufacture the company's next-generation chips. Tenstorrent has signed $150 million worth of customer deals so far.
OpenAI is reportedly exploring the addition of advertising to its artificial intelligence products. CFO Sarah Friar told the Financial Times that the firm, which is restructuring as a for-profit company, was weighing a business model that would include ads, saying OpenAI would be "thoughtful about when and where we implement them." Friar later clarified that OpenAI has "no active plans to pursue advertising" and was simply exploring other revenue streams, though the company has recently hired advertising talent from Meta and Google. Currently, OpenAI generates most of its revenue through subscriptions and usage fees for access to its AI models. The company's monthly revenue reportedly reached $300 million in August, with expectations of about $3.7 billion in annual sales this year, though it will lose billions after accounting for computing equipment, employee salaries, and other costs.
Matt Garman, who was named chief of Amazon Web Services in June, described the AI arms race as "such a foundational technology" that is "just a thing that's going to happen forever," speaking to the Wall Street Journal ahead of AWS Re:Invent, which takes place this week in Las Vegas. AWS plans to roll out major product news at the conference, which runs through Friday. Earlier this year, Amazon announced a fresh $4 billion investment in AI startup Anthropic and $100 billion in data center investment over the next decade, with rumors of a new version of its in-house "Trainium" AI chip, first launched in 2020. With about 39% of the market, Amazon is the world's largest cloud computing provider and faces ongoing competition from Microsoft (23%), Google (8%), and smaller players including Alibaba, Oracle, IBM, and Salesforce.
World Labs, founded in 2023 by AI pioneer Fei-Fei Li and technologists Justin Johnson, Christoph Lassner, and Ben Mildenhall, has unveiled an AI system capable of generating three-dimensional worlds from a single image. The system takes 2D images and produces video-game-like 3D environments, which the company describes as a "first step towards spatial intelligence." While current results are somewhat blurry and fantastical—exemplified by experiments with Edward Hopper's 1942 Nighthawks and Wassily Kandinsky's 1908 Murnau - Landscape with Green House—and remain limited in exploration range, the generated worlds "obey basic physical rules of 3D geometry" and don't change once created, features that could be valuable for video game studios designing levels. World Labs announced in September that it had raised $230 million from investors including venture firms Andreessen Horowitz, NEA, and Radical Ventures.