By Michael S. Malone
January 8, 2018

Intel and other major tech companies last week acknowledged the existence of Meltdown and Spectre, security attacks that exploit vulnerabilities in microprocessors to access secure information.

With Intel, we’ve heard this story before. But for all the similarities in tone between the latest scandal and the notorious Pentium FDIV bug over two decades ago, the details of the story and the company’s reaction to the bug’s revelation are vastly different. That’s a very good thing.

In 1994, Intel was on top of the semiconductor world. It held a virtual monopoly in the supreme chip type, the microprocessor. And it was in the midst of the most successful marketing campaign in tech history—“Intel Inside”which taught consumers to think past the PC box to the chips within. With Internet usage ramping up, it seemed like nothing could stop Intel.

Then, in June of that year, Thomas Nicely, a mathematics professor from Lynchburg College in Virginia, used his computer to perform an arithmetic calculation and got the wrong answer. Within weeks, the world had learned about this Pentium chip “bug.” The Internet had recently set off a PC boom, and now millions of new users thought those machines might be lying to them.

Panic ensued. By mid-November, lawsuits were being filed against Intel. The Wall Street Journal was covering the story almost daily. People feared planes falling out the sky, missiles firing spontaneously, or the electrical grid shutting down. There was talk of a congressional investigation. IBM publicly announced it was suspending shipment of its Pentium-based computers. The Pentium bug had become a full-on disaster.

Intel had been blindsided. Bugs had always been part of the semiconductor industry. But until then the company had mostly sold its chips to engineers and scientists, who knew how they worked and fixed them if necessary. But with “Intel Inside,” Intel had entered into a social contract with consumers, whose expectations were completely different. Rattled, Intel, led by its fiery CEO Andy Grove, responded with one publicity blunder after another, all but suggesting the public were idiots for being so concerned.

Then, remarkably, after some soul-searching, Grove did the unimaginable: He reversed himself. On Monday, Dec. 21, 1994, Intel announced that it would replace the bugged chips. The Pentium bug crisis was over. (As it turns out, very few chips were actually returned by users, proving that in a crisis, perception is more important than reality.)

Now Intel finds itself in another scandal—and the Meltdown and Spectre vulnerabilities are much more widespread and dangerous than the FDIV bug. Its competitors, notably AMD and ARM, are also embroiled in the crisis. But their problem is a software fix that only concerns the Spectre attack (hence their stock jump on the news). Since Meltdown also affects Intel’s hardware, the company will need to redesign future chips and eventually replace current chips that are vulnerable.

The 1994 Pentium bug exposed an anomaly, whereas this time the problem is ubiquitous: It potentially opens a backdoor for hackers to access operations of the processor itself. And it is not just present in one Intel chip model, but dates back at least two decades. That means it affects billions of computers and other devices, some of them embedded in very sensitive applications and in the cloud.

But despite the gravity of the current situation, it’s clear that Intel and the broader industry have learned their lesson. Intel appears to have immediately addressed the problem and notified vendors, keeping it secret from the public only long enough to put countermeasures in place. Then it told the world.

While corporate IT types no doubt are pulling out their hair and lawsuits are being prepared, average consumers—infinitely more technically sophisticated than they were in 1994, and battered by years of viruses and hacks—seem to be taking this latest insult (and possible slowed performance of their computers due to the inevitable workarounds) with rueful acceptance. That’s also a sign of progress.

Intel dodged a big bill—but paid in its public image—the last time around. I suspect that today, the opposite will be true.

Michael S. Malone is a veteran Silicon Valley journalist and author of The Intel Trinity.

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