Intel really doesn't mind "wasting" time on innovation - they make tens of billions of dollars a year and they're on top of the market. They can afford to go do

Intel really doesn't mind "wasting" time on innovation - they make tens of billions of dollars a year and they're on top of the market. They can afford to go down blind avenues, especially when the research spills out so well, as it did in this case. It definitely wasn't a "saving throw" that Larrabee's architecture got repurposed. There were several teams at Intel working in similar directions - one team worked on a "cloud on a chip", one team worked on high bandwidth chip-to-chip interconnects, one team worked on on-chip networking... they all came together and formed the Knights Ferry research project, which then got turned into the Xeon Phi. The "core" of Larrabee, its quick little Pentium-derivatives, went on to be repurposed in the Quark product line and its lineage (e.g. the Intel PCH has a "Quark" inside). The 512-bit instruction set got parted out and became AVX512 in is various incarnations. They definitely got their money's worth out of Larrabee. Nobody is disagreeing with the fact that Larrabee didn't turn into a discrete GPU despite their attempts make it so. (It's also not surprising, seeing the carriage turn back into a pumpkin with Cell and other Many Core architectures fail to pan out to be good at graphics workloads). But that's a separate issue from Intel building GPUs, since they have a completely other team that works on building productized and shipped GPUs.