By Ian Matthews – June 1 2013 – Last updated Nov 23 2018

mehdi-ali-commodores-last-presidentLets start by saying that Mehdi Ali is notable to Commodore because it died under his watch.   From what we can find, he is an otherwise unremarkable character in the world of computers or business in general .

Mr. Ali started working for Commodore in 1986 as a “special adviser” and by 1994 President Ali and his team had:

  • fumbled Amiga’s massive potential
  • failed to innovate a single financially notable computer
  • demoralized staff
  • cut and reduced the company to skeleton of its former self
  • generally devastated Commodore’s advanced technology and wiped out shareholder wealth

Home_Computer_Wars_Compute_Feb85In 1984 Commodore started on a financial slide as the ‘Home Computer Wars‘ went into overdrive.  This war with Atari, Apple, Sinclair and even IBM forced computer companies to sell computers below cost in an effort to keep market share.  The hope was that the ‘production curve’ (the theory that as volumes increase, manufacturing cost decrease because of increased efficiencies in assembly, distribution, and parts purchasing power) would substantially reduce costs and return them to profitability.  While production costs did decrease it was not enough to Sinclair, Atari and dozens of other smaller companies that went bankrupt during this time.

By 1985 the financial situation of these companies was bleak.

Commodore International reported a loss of $20.8 million for the third quarter ended March 31, compared to net income of $36.3 million in the same period last year. Sales for the quarter declined 48.5% to $168.3 million.
Source: LA Times – April 27 1985

Irving Gould, Commodore’s money man and Chairman of the Board, knew he had to do something and so he continued a line of short lived CEO’s.

Irving Gould, 69, Commodore chairman and a Toronto investor, took over the chief executive’s post and continues to hold it. Commodore had been in turmoil and close to bankruptcy. Mr. Gould forced out its founder, Jack Tramiel, in 1984 and named Marshall F. Smith as chief executive, who in turn was replaced by Mr. Rattigan.
Source: LA Times – February 2 1989

Ali had some impressive credentials for a 40 year old:

Mr. Ali, a Yale graduate, worked for Morgan Guaranty from 1969 to 1976 before joining General Motors as a vice president on the financial staff. He then went to Pepsico Inc. in the same capacity in 1980 and to Dillon, Read in 1984.
Source: LA Times – February 2 1989


Irving Gould – Commodores Financier

So it was in 1986 that Ali began his time with Commodore.  Over the next three years he proved his worth to Gould and in August 1988, Ali became a member of the Board.  In 1989 Gould had fired his second last CEO.  Ali, now just 43 years old, was promoted as the man to steer the Commodore ship with serious cost cutting as his remedy for its financial ailments.

Most pundits put the blame for Commodores eventual failure on Ali.  He and the team he assembled in the coming years were not well respected by staff:

When a company’s engineers don’t just hold their executive team in contempt, but feel actual, bona-fide loathing for their chieftains, something’s wrong. By the time Commodore went bankrupt, Commodore’s engineers really didn’t like the last executive team, led by CEO Mehdi Ali. It could be said some of them hated him. In Dave Haynie’s Deathbed Vigil video, they burn an effigy of him.

Mehdi Ali was the last CEO to be appointed by Commodore’s board of directors. Some of the blunders he and his highly paid (Ali was said in the video to have been paid something like $2 million a year)…
From Commodore to Amiga Inc – Executive Slaughterhouse

While it is critically important for a President provide investor confidence, it is even more critical that staff believe you know what you are doing and follow your lead.  Investors were initially happy with Ali but the staff were becoming increasingly frustrated with his apparent lack of vision.  Commodore staff openly derided Ali and his management team.  Moral steadily fell, good staff left the company and the business really started to unravel.


Commodore 65 DX Prototype – The C65 was never released and officially did not exist according to Commodore before it went bankrupt in 1994

In particular Ali decided cut the one cost center that technology companies can’t live without, R&D.  With R&D slashed, new products languished, sometimes for years.  The much discussed Amiga AAA chipset was started in 1989 but still wasn’t complete in 1994.  Engineers were forced to rehash old and limited technologies, so products like the never to be released Commodore 65, a modestly upgraded C64 running in 8 bit mode (in a 16 bit and soon to be 32 bit world) was scares resources were spent.

Beyond killing moral and misdirected cost cutting, there was also an inability to close corporate deals.  Commodore had so very many opportunities to return to profitability and regain its rightful juggernaut status but Ali’s decisions kept the company is disarray:

The brutal slaughter of a deal with Sun Microsystems that would have made Sun an OEM for Amiga computers. Sun wanted to use Amiga’s version of Unix for Sun’s low-end Unix solution. Medhi Ali and his team sabotaged the deal twice by demanding a fortune in licensing fees. Sun eventually gave up and Amiga’s chances to expand into the Unix market dried up forever.
From Commodore to Amiga Inc – Executive Slaughterhouse

commodore-amiga-a1000Beyond all of these errors, there was Ali’s inability to appreciate the potential of existing products, in particular the Amiga line.  Mehdi Ali thought of Amiga as some sort or next generation Commodore 64 rather than an a ground breaking business machine with potential to kill IBM’s PC business.

Commodore were not interested in the Amiga, it was simply their next product…  it would have been cast aside just like the C64 was, as soon as the next gen machine was ready.  Take a skim through this interesting thread by our friends at Commodore without Mehdi Ali

Ali’s 6+ years at Commodore left it in ruin and they filed for Bankruptcy protection in 1994.

In 2013, Mehdi Ali and his son run Stone Ridge Partners, which is a private equity firm that buys struggling companies.  He also sits on the “advisory board of “American Industrial” which is another private equity firm.  These types of firms are nearly always focused on short term gain with a 6 month to two year time horizon.  Oddly, Mehdi took ‘credit’ for his time at Commodore on his site:

Mehdi has been a principal of the firm since its inception in 1996. Mehdi’s background includes more than twenty years of operating experience. His prior experience includes serving as the President of Commodore International, where he accomplished a major operational turnaround.

Ultimately, the blame for any corporate failure goes to the CEO and Board of Directors. In this case I think it can be safely said that Irving Gould, Commodore’s financier and Chairman of the Board, holds the most blame for Commodore failure, if for no other reason than for keeping Ali’s management team in place.  However, Gould’s failure to remove Ali does not improve Ali’s ugly legacy.

Post Script:

I think this story would make an excellent case study for a University level business course.  The moral of the Commodore / Ali story can be summed up in an old business adage “you can’t cut your way to growth”.  Cost cutting is a short term periodic requirement in all companies but it is also the way to guarantee failure in the long run.  Many investors (especially in 2010 era) are interested in a short one year or less horizon but companies must think long term if they wish to prosper and a President needs to balance these competing interests.  Cutting marketing and R&D in a technology companies dealing in the retail space is a sure formula for disaster.

When writing this article I found a telling comment from a reader:  Mehdi helped destroy the next project he was involved in… a company I was the CFO in until he became involved and “created profits for the short run”…not for the future of the company.

In November 2018 when we checked his Stone Ridge Partners web site, we found it became defunct sometime in 2016.  The cynic in us says… not a surprise, but Ali’s history shows that he always took good care of himself to we are left to assume he either pulled investor money or sold the business to someone else.


Manual da Mulher Sábia pdf · January 14, 2023 at 9:07 am

Your site is very good, I liked the information of Iriving Gould and Commodore. Grateful. 36012937

Witcher · July 23, 2021 at 2:39 am

at least this shady Mehdi Ali has already entered the computer history books as “the slaughterer of Commodore”. Together with some of his incompetent, short-sighted CBM manager-noobs and their missing know-how or vision, which have fully counteracted their own developers over the last Commodore-years. You disgusting, selfish creatures are really a palty shame.

Robert Lester · October 10, 2019 at 3:46 am

The C65 was not a modestly upgraded C64. It had better than Amiga graphics, a processor 350% faster and a built in 3.5″ drive. If Commodore had not stalled it’s development for the other turkeys like the CDTV and released it 2 years earlier, it would have cleaned up in the low cost micro sector….

    Hwan · February 21, 2023 at 2:17 am

    How can a computer w/8bit CPU and 128kb memory run 350% faster than an Amiga?

Rob · October 10, 2019 at 3:45 am

The C65 was not a modestly upgraded C64. It had better than Amiga graphics, a processor 350% faster and a built in 3.5″ drive. If Commodore had not stalled it’s development for the other turkeys like the CDTV and released it 2 years earlier, it would have cleaned up in the low cost micro sector….

    Someone · June 16, 2023 at 2:59 am

    The post above is a double. Admin please remove one of the two.

      Ian Matthews · July 11, 2023 at 9:09 pm

      Hi SOMEONE 🙂 Which post is a double?

[email protected] · April 8, 2015 at 12:20 am

Amiga technology was revolutionary. Rattigan was a true leader and managed to get great products to the market. He was able to cut the right unproductive branches and to give resources to where they were in most effective use. That takes real understanding of how things work.

Gould was jealous of the respect that Rattigan was getting. Its a sad loss that future of Amiga technology had to fall victim of Goulds power-play in the company. He was used to dirty tricks and corporate politics during his career. Thats why he put that Ali in power. A corporate hatchet-man that had zero understanding of the industry.

Just think what it would have meaned for Amiga technology and Commodore as a company if Rattigan could have continued to lead?

Charlie · May 24, 2014 at 4:59 am

The “Commodore 64 Production” image is wrong. It doesn’t show a C64, but a C64x rather, which was an ill-fated homage-wannabe to the C64 by a company called “Commodore USA” just a few years ago, based on an Intel x86 mainboard.

(You can clearly see, the it on the keyboard, among others, the original C64 had only four function keys on the right, while the box on the top shows five, and there are other differences.)

    Ian Matthews · May 27, 2014 at 7:45 pm

    Good eye Charlie! I pulled that image from my archive a very long time ago. In fact, if you were not obviously correct, I would insist that I created it BEFORE Commodore USA existed.

    Thanks for the help. I will get that fixed sooooooooon!

Harald Hansen · April 3, 2014 at 10:43 am


Amiga ceased to be a company in 1984, when Commodore bought their technology and employed their crew. You were dealing with Commodore, which was the proper company name. Since I live in Norway, I deal with the retailer where I bought the product, so I’ve never had to deal with Commodore directly. But it sounds like they gave you a hard time.

Albatross · December 29, 2013 at 7:52 pm

This is enlightening and helpful. I ended up having a bad experience with Amiga – the company – that soured my experience with Amiga – the product. For literally twenty years the way I was treated as a customer bothered me.

I spent a LOT of money to buy a top model Amiga (the 2000 maybe? Can’t recall). Nine months in, the monitor failed. So I paid shipping to have it replaced under warranty. A month later THAT monitor failed, and was replaced barely under the original one year warranty. Then the THIRD monitor failed and Amiga refused to replace it because 14 months had passed since my original purchase.

I argued all the way up to the Vice President of Sales – pointing out that the replacement monitor(s) ought to have had even 90-day warranties attached to them, AND that I had lost about three months of the use of my computer in the first 14 as it sat around with no monitor awaiting the replacement, AND that I’d spent about as much shipping lemon monitors back to them as a new one would have cost. No joy. And so I gave away my Amiga CPU and they lost me as a customer.

It sounds from this article like I wasn’t the only person screwed by this incompetent beneficiary of the Peter Principle.

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