Intel and HP spent billions on Itanium — AMD won with a compatible extension

Itanium (originally IA-64) was a 64-bit microprocessor architecture developed jointly by Intel and Hewlett-Packard. HP had started researching it in 1989, and the collaboration was announced in 1994 with much fanfare — Itanium was supposed to be the future of enterprise computing, replacing both x86 and RISC architectures. Intel and HP invested billions in development, marketing, and ecosystem building over more than a decade.

The first Itanium processor, Merced, launched in June 2001 after multiple delays. The results were immediately disappointing. Itanium's performance was worse than existing RISC and high-end x86 chips, and its x86 emulation was 'particularly poor' — existing software ran slowly or not at all. The architecture and compiler were far more difficult to implement than expected. Only a few thousand systems sold in the first year. The processor was nicknamed 'Itanic' within hours of the official name announcement.

AMD dealt the fatal blow in 2003 with Opteron, the first processor implementing x86-64 (AMD64). It added 64-bit capability to the existing x86 architecture, so every piece of 32-bit software ran unchanged — no emulation, no recompilation. Server customers flocked to the compatible solution. By 2008, HP accounted for 95% of all Itanium sales, and the chip survived only because HP kept paying Intel to produce it — $440 million from 2009 to 2014, then another $250 million to extend production to 2017.

Intel released several generations of Itanium (McKinley, Montecito, Tukwila, Poulson, Kittson) but never achieved meaningful market share. An estimated 184,000 Itanium-based systems were sold from 2001 through 2007 — a tiny fraction of the server market. Annual shipments fell to 26,000 by 2016. Intel stopped accepting orders in January 2020 and ceased shipments in July 2021, ending a 27-year project that began before Windows 95 was released.