Intel’s CEO is stepping down as the stalwart American chipmaker has struggled to keep pace with the artificial intelligence revolution.
The company announced that Pat Gelsinger, who’d led Intel since 2021 and logged more than 30 years in various positions with the chipmaker, had retired from the company effective Sunday.
“While we have made significant progress in regaining manufacturing competitiveness and building the capabilities to be a world-class foundry, we know that we have much more work to do at the company and are committed to restoring investor confidence,’ Intel’s board chair, Frank Yeary, said in a news release.
Intel, once the standard-bearer for American computer chip manufacturing, has struggled to keep up with the turn toward AI computing over the past couple years. Having largely missed out on the smartphone boom of the 2010s, Intel could not afford another misstep by failing to anticipate the next major tech trend.
Yet, it largely has missed the mark — and has suffered disastrous consequences as a result.
As the AI boom began to dawn in 2022, major tech giants began to tap a rival chipmaker, Nvidia, to handle many of their AI computer processing needs.
That’s because Nvidia’s graphics processing unit (GPU) chips are better able to handle the strenuous computing power needs of AI processes. Nvidia’s GPUs are able to perform calculations more efficiently thanks to their ‘parallel processing ability,’ whereas regular computer-processing units, or CPUs — the kind of chips Intel has long specialized in — are better suited for straightforward computing tasks like writing files to a disk.
As a result, demand for Nvidia’s chips has proven virtually insatiable.
Intel shares have declined 61% since Gelsinger took over, while Nvidia’s surged more than 820% over the same time period.
The S&P 500 rose 54% over that time.
Nvidia is now valued at more than $3 trillion, while Intel’s market cap stands at approximately $100 billion — about 30-times smaller than Nvidia.
Gelsinger had embarked on a campaign to turn the company’s fortunes around, stating in Intel’s most recent earnings report that it was in the midst of its most critical restructuring since it was established in 1968.
The Biden administration has sought to support Intel through CHIPS Act funding — but last month, announced it was reducing the size of a planned investment by $600 million compared with the award it had earlier announced in March. While some of that was due to Intel having also announced a $3 billion Defense Department contract, the Commerce Department noted that timelines for some projects had extended beyond a 2030 government deadline.