# Max Palevsky
Max Palevsky (1924–2010) was an American computer-industry entrepreneur who founded [Scientific Data Systems](https://www.edgepedia.org/scientific-data-systems) (SDS) in California in 1961, built it into one of the few consistently profitable American computer makers of the 1960s, and sold it to Xerox in 1969 for a price reported between about $900 million and $1 billion.[1](https://www.nytimes.com/2010/05/07/us/07palevsky.html) • [2](https://www.historyofcomputercommunications.info/section/2.26/Personal-Distributed-Computing-Xerox-PARC-1980/) • [3](https://www.hbs.edu/leadership/20th-century-leaders/details?profile=max_palevsky) He then helped finance the founding of Intel, chaired Xerox's executive committee, rescued Rolling Stone magazine, and became a major art collector and Democratic political donor.[1](https://www.nytimes.com/2010/05/07/us/07palevsky.html) • [4](https://www.latimes.com/local/obituaries/la-me-0506-max-palevsky-20100506-story.html)
| Fact | Detail |
|---|---|
| Founded | Scientific Data Systems, 1961, with colleagues from Packard Bell[1](https://www.nytimes.com/2010/05/07/us/07palevsky.html) |
| First-year result | Loss of $511,000, followed by profits of $1.3 million (1963) and $2.1 million (1964)[5](https://www.nytimes.com/1966/04/03/archives/personality-for-success-a-touch-of-karate-scientific-data-chief.html) |
| 1966 scale | Sales of $55.5 million, profits of $4.3 million, 2,900 employees[6](https://time.com/archive/6834439/computers-enter-max-palevsky/) |
| Sale to Xerox | 1969, for about $900 million in stock (roughly nine times 1968 revenues of $100 million); other reports give $920 million or $1 billion[2](https://www.historyofcomputercommunications.info/section/2.26/Personal-Distributed-Computing-Xerox-PARC-1980/) • [3](https://www.hbs.edu/leadership/20th-century-leaders/details?profile=max_palevsky) • [1](https://www.nytimes.com/2010/05/07/us/07palevsky.html) |
| Outcome for Xerox | Computer division shut down in 1975; estimated loss of $1.3 billion by one account, hundreds of millions by another[2](https://www.historyofcomputercommunications.info/section/2.26/Personal-Distributed-Computing-Xerox-PARC-1980/) • [7](https://www.ithistory.org/resource/scientific-data-systems) |
| Later roles | Founder and director of Intel; director and board chairman of Rolling Stone[4](https://www.latimes.com/local/obituaries/la-me-0506-max-palevsky-20100506-story.html) • [8](https://www.nbclosangeles.com/news/local/max-palevsky/2103908/) |
| Death | May 2010, at his home in Beverly Hills, California, aged 85[1](https://www.nytimes.com/2010/05/07/us/07palevsky.html) |
## Founding Scientific Data Systems
Palevsky had worked at Packard Bell Computer Corp. before leaving in 1961 to found Scientific Data Systems.[8](https://www.nbclosangeles.com/news/local/max-palevsky/2103908/) Accounts differ on the size of the group that left with him: Time reported that SDS was set up by six former employees of Packard-Bell Electronics,[6](https://time.com/archive/6834439/computers-enter-max-palevsky/) while the New York Times' obituary said he founded the company with 11 colleagues from [Packard Bell](https://www.edgepedia.org/packard-bell), to build small and medium-size business computers in a niche they believed IBM was ignoring.[1](https://www.nytimes.com/2010/05/07/us/07palevsky.html) InformationWeek described the group as scientists and engineers who spotted an opening below IBM's dominance of business machines.[9](https://www.informationweek.com/it-sectors/computer-pioneer-max-palevsky-dead-at-85)
The startup was undercapitalized at the personal level. In the Scientific Data Systems alumni oral history, investor [Arthur Rock](https://www.edgepedia.org/arthur-rock) recalled lending Palevsky $5,000 as a personal loan because Palevsky was short of cash while promoting the new company; Palevsky repaid it.[10](http://archive.computerhistory.org/resources/text/Oral_History/SDS/102658201.05.01.acc.pdf) Rock was not the only backer: panel participants recalled that Leonard Sperry and his brother put up money, as did another venture capitalist.[10](http://archive.computerhistory.org/resources/text/Oral_History/SDS/102658201.05.01.acc.pdf) Time reported Palevsky's own original investment as $20,000.[6](https://time.com/archive/6834439/computers-enter-max-palevsky/)
## Building SDS: strategy and growth
**The strategy was to avoid IBM head-on.** In his 2006 [Computer History Museum](https://www.edgepedia.org/computer-history-museum) oral history, Palevsky explained that SDS built small computers for scientific purposes in direct but limited competition with IBM, whose pricing caution left that niche open: if IBM built a small scientific computer that was good and price-competitive, its main competition would be itself, because it would cannibalize its larger machines. He estimated SDS's share of that niche at roughly 30 to 40 percent.[11](http://archive.computerhistory.org/resources/text/Oral_History/Palevsky_Max/Palevsky_Max_1.oral_history.2006.102657969.pdf) A 1966 New York Times profile described the same approach in his own terms: the California-based company was a midget compared with the giants of electronic data processing, and its method was to find neglected market weak spots and strike at them rather than compete directly.[5](https://www.nytimes.com/1966/04/03/archives/personality-for-success-a-touch-of-karate-scientific-data-chief.html)
[Harvard Business School](https://www.edgepedia.org/harvard-business-school)'s leadership record credits SDS as one of the first companies to create a line of compatible and modular computers using components sourced from a variety of suppliers, targeting the medical and scientific communities.[3](https://www.hbs.edu/leadership/20th-century-leaders/details?profile=max_palevsky) The company introduced seven computers between 1962 and 1965.[5](https://www.nytimes.com/1966/04/03/archives/personality-for-success-a-touch-of-karate-scientific-data-chief.html)
Growth was fast. SDS lost $511,000 in its first year, then earned $1.3 million in 1963 and $2.1 million in 1964.[5](https://www.nytimes.com/1966/04/03/archives/personality-for-success-a-touch-of-karate-scientific-data-chief.html) In fiscal 1965 it earned $3,371,628, or $1.51 a share, which the Times said probably made every other company but one in the industry envious.[5](https://www.nytimes.com/1966/04/03/archives/personality-for-success-a-touch-of-karate-scientific-data-chief.html) By 1966, five years after founding, sales were $55.5 million and profits $4.3 million, both up 27 percent over 1965, and Time counted SDS as one of three U.S. computer makers to have consistently turned a profit.[6](https://time.com/archive/6834439/computers-enter-max-palevsky/)
## By the numbers
The quantities define the arc. Palevsky's founding investment was $20,000.[6](https://time.com/archive/6834439/computers-enter-max-palevsky/) The first-year loss was $511,000, against 1966 profits of $4.3 million.[5](https://www.nytimes.com/1966/04/03/archives/personality-for-success-a-touch-of-karate-scientific-data-chief.html) • [6](https://time.com/archive/6834439/computers-enter-max-palevsky/) In 1966 SDS boosted its debt from less than $2 million to more than $16 million, built a fifth new plant, and increased employment to 2,900; its stock rose 42 points to $84.50, doubling the value of Palevsky's 15 percent shareholding to $27 million.[6](https://time.com/archive/6834439/computers-enter-max-palevsky/) The 1969 sale price is reported as about $900 million in Xerox stock,[2](https://www.historyofcomputercommunications.info/section/2.26/Personal-Distributed-Computing-Xerox-PARC-1980/) $920 million,[3](https://www.hbs.edu/leadership/20th-century-leaders/details?profile=max_palevsky) or $1 billion, with Palevsky taking home a 10 percent share of the sale.[1](https://www.nytimes.com/2010/05/07/us/07palevsky.html)
## The Xerox acquisition and its aftermath
Xerox, then earning lavishly from its copying patents, agreed to buy SDS in an all-stock deal negotiated quickly: the History of Computer Communications project records that Xerox would pay $900 million in Xerox stock, nine times SDS's 1968 revenues of $100 million, with the deal completed in two weeks.[2](https://www.historyofcomputercommunications.info/section/2.26/Personal-Distributed-Computing-Xerox-PARC-1980/) During the Xerox years the company was officially named Xerox Data Systems (XDS).[7](https://www.ithistory.org/resource/scientific-data-systems)
The acquisition failed within six years. The IT History Society records that mismanagement and dwindling sales caused Xerox to close the division in 1975 at a loss of hundreds of millions of dollars;[7](https://www.ithistory.org/resource/scientific-data-systems) the History of Computer Communications puts the estimated loss at $1.3 billion and quotes Xerox's chief later admitting, "In retrospect, the Scientific Data acquisition was a mistake."[2](https://www.historyofcomputercommunications.info/section/2.26/Personal-Distributed-Computing-Xerox-PARC-1980/)
## How SDS compared with its rivals
SDS's earnings were modest next to IBM's net income of $476.9 million in 1965, and the Times noted that seven of the nation's largest corporations were fighting to turn the red ink of their computer businesses into black.[5](https://www.nytimes.com/1966/04/03/archives/personality-for-success-a-touch-of-karate-scientific-data-chief.html) Against that field, SDS's consistent profitability in the small scientific niche stood out.[6](https://time.com/archive/6834439/computers-enter-max-palevsky/)
Its competitive lane also differed from other IBM challengers. [Control Data Corporation](https://www.edgepedia.org/control-data-corporation) and [Digital Equipment Corporation](https://www.edgepedia.org/digital-equipment-corporation) were both founded in 1957; CDC, built around [Seymour Cray](https://www.edgepedia.org/seymour-cray)'s design skills, pursued the fastest computers, while DEC targeted mid-sized, more affordable machines and pioneered minicomputing.[12](https://mncomputinghistory.com/control-data-corporation/) SDS, by contrast, concentrated on the small, previously neglected scientific market to avoid competing directly with both IBM and Control Data.[6](https://time.com/archive/6834439/computers-enter-max-palevsky/)
## Later career: Intel, Rolling Stone and politics
In 1968, while still running SDS, Palevsky applied some of his money to financing a small start-up company in Santa Clara to make semiconductors; it became Intel, today the world's largest producer of computer chips.[1](https://www.nytimes.com/2010/05/07/us/07palevsky.html) After the Xerox sale he served as a director and chairman of Xerox's executive committee before becoming a founder and director of Intel Corp.[4](https://www.latimes.com/local/obituaries/la-me-0506-max-palevsky-20100506-story.html)
His cultural footprint came through publishing and film. He bought a substantial share of Rolling Stone's stock, became a director and board chairman of the magazine, and revitalized the then-struggling publication; the Los Angeles Times also credits him with coming up with the cash to save the fledgling magazine and with bankrolling movies.[8](https://www.nbclosangeles.com/news/local/max-palevsky/2103908/) • [4](https://www.latimes.com/local/obituaries/la-me-0506-max-palevsky-20100506-story.html) Politically, with the [Vietnam War](https://www.edgepedia.org/vietnam-war) raging he plunged into antiwar activity in 1971 and 1972,[13](https://prospect.org/2010/05/06/max-palevsky-1924-2010/) and he went on to back Democratic presidential candidates.[1](https://www.nytimes.com/2010/05/07/us/07palevsky.html)
## Collecting, philanthropy and legacy
Palevsky first collected Modernist art and later amassed a collection of American Arts and Crafts furniture; the Los Angeles Times credits his Arts and Crafts and Japanese woodblock print collections with helping turn the [Los Angeles County Museum of Art](https://www.edgepedia.org/los-angeles-county-museum-of-art) into a destination.[1](https://www.nytimes.com/2010/05/07/us/07palevsky.html) • [4](https://www.latimes.com/local/obituaries/la-me-0506-max-palevsky-20100506-story.html) He was a former trustee of the University of Chicago, where philanthropy tied to him includes the Palevsky Professorship.[14](https://news.uchicago.edu/story/max-palevsky-entrepreneur-who-helped-shape-uchicago-campus-1924-2010) In later years he soured on politics and concentrated on art.[4](https://www.latimes.com/local/obituaries/la-me-0506-max-palevsky-20100506-story.html)
His place in computing history is unusual in geography: he built his fortune at a California-based company rather than in [Silicon Valley](https://www.edgepedia.org/silicon-valley), though his 1968 investment in the Santa Clara company that became Intel tied him to the Valley's founding.[5](https://www.nytimes.com/1966/04/03/archives/personality-for-success-a-touch-of-karate-scientific-data-chief.html) • [1](https://www.nytimes.com/2010/05/07/us/07palevsky.html) He died on a Wednesday in May 2010, at his home in Beverly Hills at 85.[1](https://www.nytimes.com/2010/05/07/us/07palevsky.html)
## References
1. [Max Palevsky, a Pioneer in Computers, Is Dead at 85 (The New York Times, May 7, 2010)](https://www.nytimes.com/2010/05/07/us/07palevsky.html)
2. [Personal Distributed Computing, Xerox PARC, 1980 (History of Computer Communications)](https://www.historyofcomputercommunications.info/section/2.26/Personal-Distributed-Computing-Xerox-PARC-1980/)
3. [Max Palevsky, Leadership (Harvard Business School)](https://www.hbs.edu/leadership/20th-century-leaders/details?profile=max_palevsky)
4. [Computer magnate and philanthropist Max Palevsky dies at 85 (Los Angeles Times, May 6, 2010)](https://www.latimes.com/local/obituaries/la-me-0506-max-palevsky-20100506-story.html)
5. [Personality: For Success, a Touch of Karate (The New York Times, April 3, 1966)](https://www.nytimes.com/1966/04/03/archives/personality-for-success-a-touch-of-karate-scientific-data-chief.html)
6. [Computers: Enter Max Palevsky (Time, 1967)](https://time.com/archive/6834439/computers-enter-max-palevsky/)
7. [Scientific Data Systems (IT History Society)](https://www.ithistory.org/resource/scientific-data-systems)
8. [LA Arts Philanthropist Max Palevsky Dead at 85 (NBC Los Angeles)](https://www.nbclosangeles.com/news/local/max-palevsky/2103908/)
9. [Computer Pioneer Max Palevsky Dead At 85 (InformationWeek, 2010)](https://www.informationweek.com/it-sectors/computer-pioneer-max-palevsky-dead-at-85)
10. [Scientific Data Systems Alumni Oral History Panel (Computer History Museum)](http://archive.computerhistory.org/resources/text/Oral_History/SDS/102658201.05.01.acc.pdf)
11. [Oral History of Max Palevsky (Computer History Museum, 2006)](http://archive.computerhistory.org/resources/text/Oral_History/Palevsky_Max/Palevsky_Max_1.oral_history.2006.102657969.pdf)
12. [Control Data Corporation (Minnesota Computing History)](https://mncomputinghistory.com/control-data-corporation/)
13. [Max Palevsky, 1924 - 2010 (The American Prospect, May 6, 2010)](https://prospect.org/2010/05/06/max-palevsky-1924-2010/)
14. [Max Palevsky, entrepreneur who helped shape UChicago campus, 1924-2010 (University of Chicago News)](https://news.uchicago.edu/story/max-palevsky-entrepreneur-who-helped-shape-uchicago-campus-1924-2010)
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*Topic: Encyclopedia › Society and history › Economics and business › Founders, operators, and investors › Technology founders and companies › Computing pioneers, 1945 to 1995*
*Initially written Sep 19, 2026 · Reviewed: Sep 19, 2026; Sep 30, 2026 · Edited: Oct 11, 2026 · Last review: Sep 30, 2026*
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