system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: What did AMD do wrong and why did they fall behind Intel in terms of processors?
gpt
The history between AMD and Intel is extremely interesting.  AMD was actually only able to make x86 chips because of IBM, who wanted to use the Intel 8086 chips in its IBM Personal Computers, or PCs, and required two manufacturers - much like how Apple today has multiple manufacturers of all of the components in their phones and tablets.

So AMD piggy backed in a way on the innovations of Intel, providing clones of their architecture and chipsets.  However, after a decade of licensing Intel's architecture, AMD had to stop producing new clones of Intel's designs, meaning that AMD had to design its own architectures that may, or may not, have included compatibility with Intel's.  Ironically, modern 64bit processors are of AMD design:  Intel had designed the original x86 architecture, but was pushing "Itanium" for theri 64 big instruction set, called i64.  However, AMD extended the x86-32 architecture (32 bit x86 - it had already been extended from its original 16 bit) into the x86-64 that's in common use today.

But even with Intel adopting and licensing their instruction set, Intel as a company is simply better at two things: chip design, and chip naming.  Intel's chips work and are stable, throughout the whole range of their chips.  AMDs work, usually, but are less stable, and underperform when compared to Intel chips of similar spec.  Intel's naming and marketing is very phenomenal - They use simple series names with revision numbers to help people know what's next, and give specs like "Cores", "Clock Speed" and "Cache Size" to help people quickly and easily compare chips or figure out what the chip can do.  As such they're favored by businesses because they are significantly more transparent with those figures than AMD is.  And even among non-techies, Intel is a known brand name that they can trust when they go and buy a computer.

At the moment, AMD is struggling to try and define a market, creating their own terms like "APU" instead of CPU with GPUs.  While they've made strides to be more transparent with frequencies and capacities, they still feel to professionals like they're trying to pull a fast one: their current A-series APUs, for instance, list "Compute cores (CPU + GPU, total count)" instead of treating the two separately.  As any professional can tell you, those aren't the same and need to be treated separately!  But at the same time, they are a good "cheaper alternative" for consumers who will never know (or never need to know) the difference, and their competition in the market place keeps them alive and drives innovation.

AMD IS however doing really well with their ATI graphics division, which they acquired a few years back: it's still just as well known as Nvidia, and often as reliable.