Intel, one of Microsoft’s crucial chums, has been experiencing a tough time. The chipmaker’s stock is in freefall, its best CPUs have faced high-profile failures, and rivals AMD and Nvidia are leaving it in the dust in the AI race. Things have gotten so dire that Intel’s CEO, Pat Gelsinger, stepped down in December after decades with the company.

Gates said he was stunned that Intel had lost its way.

“They missed the AI chip revolution, and with their fabrication capabilities, they don’t even use standards that people like Nvidia and Qualcomm find easy.

Gates said Gelsinger was brave to say, ‘No, I am going to fix the design side, I am going to fix the fab side.’ I was hoping for his sake, for the country’s sake, that he would be successful.

“I hope Intel recovers, but it looks pretty tough for them at this stage.”

Gates’ comments cast a bleak light on Intel’s future, though he remains hopeful. Despite a recent uptick in stock prices due to acquisition rumours, the company is far from the powerhouse it once was.

Its latest desktop and laptop chips have garnered more positive attention, and its new discrete GPUs are making strides in the budget market. Yet, selling to budget-conscious PC gamers alone won’t turn Intel’s fortunes around.

While Intel is nowhere near collapsing, its market dominance has undoubtedly waned.