Once the king of chipmaking, Intel's decline has been one for the ages, with its stock down two-thirds from its 2020 high. "Chipzilla" has now fallen behind many others, and its profitability has evaporated. Even after Intel trimmed 17% of its head count in 2023 and 2024, new CEO Lip-Bu Tan has launched another large workforce reduction in 2025, including another 5,000 layoffs in the past week, according to filings from four states.

Intel stock has plummeted from its 2020 high.

Almost two decades ago, new technologies slowly began to challenge Intel's dominance: Arm-based CPUs and Nvidia's accelerated GPU computing. At the time, Arm chips were seen as underpowered, and GPU computing was expensive and limited to certain use-cases like AI. Intel's customers mostly said that they weren't interested in those alternatives.

Intel listened to its customers, and those newer technologies slowly grew until they swamped Intel. Technology leaders have to be willing to disrupt themselves, or they will be disrupted.

Intel's first mistake came in 2005, right in the middle of its best years. It had just signed Apple as a customer for Mac chips, and Steve Jobs asked then-CEO Paul Otellini if Intel would like to make the chip for his coming smartphone.

Otellini declined. By the time he left Intel in 2013, smartphones had overtaken PCs as people's primary device, and it was obvious that Intel had missed out on a huge opportunity.

Apple chose a Samsung chip based on Arm's designs for the first iPhone in 2007. By 2010, Apple was designing its own Arm chips, and Apple began to manufacture at Taiwan Semiconductor Manufacturing, a key partnership, in 2014. The cash flows from iPhone powered innovation from Apple, Arm, and Taiwan Semi year after year.

Intel kept dominating PC and server markets, but before long it had a full-blown manufacturing crisis. Unlike Apple, Nvidia, and many others, Intel fabricates its own chips. It had remained the leader by delivering more advanced manufacturing processes every two years. Then Intel failed to launch its 2016 process on time, and it wasn't seen until 2019.

During this crucial period, Taiwan Semi's technology overtook Intel's. This became apparent in the fall of 2018 during Apple's product introductions. It unveiled a new iPad Pro running on a beefed-up iPhone chip and a MacBook Air sporting an Intel laptop chip. It turned out that the Apple chip was faster, while also remaining more efficient.

From there, the writing was on the wall. Apple represented 10% of Intel's revenue in 2019. After the first Apple Silicon Macs shipped in 2020, Apple took that 10% and split it with Taiwan Semi and Arm.

Intel's technological woes continued. Trying to get back to its two-year cadence, Intel hoped to launch a new manufacturing process in 2021, which was also met with delays. With former CFO Bob Swan at the helm, it seemed to many that Intel was prioritizing the stock price over technological leadership. Swan was fired in February of that year.

He was replaced by former Intel chip-design engineer Pat Gelsinger, who brought a lot of optimism, energy, and a bold plan to the beleaguered giant.

But then Intel suffered another blow. Its CPU chips still reigned in the data center, but the AI investment boom touched off by ChatGPT at the end of 2022 turned out poorly. In a two-way race for data center supremacy with Nvidia, Intel took 70% of the combined 2021 revenue. In 2024, it was 10%. Last year, Taiwan Semi's revenue exceeded Intel's by 70%.

All this has weighed heavily on Intel's financials. It went from $20 billion in profit in 2021 to a $19 billion loss in 2024.

With his plan hanging by a thread, Gelsinger was fired in December. After a search, the Intel board hired Tan in March. He has brought a more sober tone to Intel's challenges.

His first step is to refocus Intel on engineering. "We will also remove organizational complexity," he wrote in an April letter to employees, which Intel pointed to when asked for comment. "Our competitors are lean, fast and agile -- and that's what we must become to improve our execution."

To avoid all this, Intel could have been planning for the future by looking to its own past. Andy Grove was Intel's third employee and third CEO, and he wrote a book called Only The Paranoid Survive. It details how tech leaders can avoid falling into the pit Intel finds itself in now.

"When it comes to business, I believe in the value of paranoia," he wrote in the book's preface. "Business success contains the seeds of its own destruction. The more successful you are, the more people want a chunk of your business and then another chunk and then another until there is nothing left. I believe that the prime responsibility of a manager is to guard constantly against other people's attacks."

It's a lesson that all tech leaders need to embrace.