Can Anyone Save Intel?

Pat Gelsinger's dramatic exit from Intel marks the end of a comeback story that never quite happened. The board's decision to oust their CEO over Thanksgiving weekend – without even having a replacement lined up – speaks volumes about how badly things had gone off track.

Just three years ago, Gelsinger swept back into Intel like a returning hero. The veteran engineer who'd spent 30 years at the company before making it big at VMware seemed like the perfect choice to restore Intel's faded glory. Even the company's harshest critics, like activist investor Daniel Loeb, were won over by his bold vision.

He promised to transform Intel back into a manufacturing powerhouse, rake in customers for their chip-making business, and catch up to Nvidia in AI chips.

He convinced the U.S. government to hand over $8 billion in subsidies and got Wall Street excited about Intel's comeback story.

But let's look at the scoreboard: Intel's stock has dropped by half this year. Their manufacturing business lost $7 billion in 2023. Meanwhile, Nvidia has become a $3.35 trillion giant in AI chips, and even AMD has pulled ahead.

Gelsinger's big plan to compete with Taiwan's TSMC in making chips for other companies? Customers weren't exactly lining up.

The real gut punch for Intel came when Apple, one of their biggest and most prestigious customers, decided to go it alone.

After years of using Intel's chips to power their Macs, Apple shocked the industry by announcing they'd design their own processors. The message was clear: they could do better without Intel.

And they did. Apple's custom-designed M1 and M2 chips have been a game-changer for their MacBooks and iMacs, delivering better performance and battery life than their Intel-powered predecessors ever did.

For Intel, losing Apple wasn't just about lost revenue – it was a brutal public demonstration that they were no longer the undisputed kings of chip design.

This wasn't just another customer walking away. This was Apple – the company that helped make Intel a household name with those "Intel Inside" stickers on millions of Macs – essentially telling the world they could build better chips themselves. And worse, they were proving it.

The Apple split became a symbol of how far Intel had fallen. Once the company that other tech giants depended on, Intel was now watching from the sidelines as their former partners became competitors. It was a wake-up call that the tech world had changed – and Intel hadn't changed with it.

The board finally did what boards are supposed to do – they saw the pattern of overpromising and underdelivering wasn't changing.

Sure, running Intel isn't an easy job. The company has fallen behind in pretty much everything that matters in today's chip world – AI, mobile, advanced manufacturing.

But Gelsinger's approach of making grand promises while the company kept losing ground clearly wasn't the answer.

Now Intel's got to figure out what's next. Do they keep trying to be a manufacturing powerhouse, or focus on designing chips and let someone else make them? Either way, at least they've stopped waiting for promises that weren't being kept.

Sometimes the simplest explanation is the right one: talk is cheap, results matter, and four years is plenty of time to show you can deliver. Gelsinger couldn't, so now it's someone else's turn to try.

It's quite a fall from grace for a company that was once the crown jewel of American technology. The next chapter in Intel's story will be fascinating to watch – but right now, nobody seems to have a clear answer to that billion-dollar question: Who can turn this ship around?

Intel could end up abandoning manufacturing just as they've secured massive government support to expand it. With Donald Trump set to return to the White House, the future of those subsidies – and America's semiconductor strategy – looks increasingly uncertain.

For Silicon Valley's original chip giant, the stakes couldn't be higher. The question now isn't just who can save Intel – it's whether the Intel we know can be saved at all.

Sources