It was #1. The potential for these side-channels attacks have been known for well over 15 years, ever since RSA was cracked with a microphone. From an engineeri

It was #1. The potential for these side-channels attacks have been known for well over 15 years, ever since RSA was cracked with a microphone. From an engineering standpoint it was obviously risky to speculate across security domains, which is why AMD consistently abstained from doing so. Intel consistently speculates across security domains. Neither of these is a coincidence.[1] Intel took a gamble and lost. Well, they lost from an honest engineering standpoint. Still unclear if they lost anything from a market perspective, and we may never know because they're losing even bigger in terms of fabrication, which will obscure the effect of their horrible security fumbles. [1] You don't need to know the details of an exploit to avoid a vulnerability. You just need to know what you don't know, and for side-channel attacks it's relatively easy to know what we don't know--any calculation where a timing, power, etc differential is even indirectly visible (at any level of precision) is suspect. Sometimes you have to take the risk, but some risks (i.e. speculating across security domains) are just too great, especially in an environment as sensitive and security critical as a CPU. Intel engineers knew. They couldn't have not known; they're hardly incompetent.