As the venerable American chipmaker has found it difficult to stay up with the artificial intelligence (AI) revolution, Intel’s CEO is resigning.
The business declared After serving as Intel’s CEO since 2021 and holding a variety of roles for over 30 years, Pat Gelsinger announced his retirement from the business on December 1.
In a news release, Intel’s board chair Frank Yeary stated, “We know that we have much more work to do at the company and are committed to restoring investor confidence, even though we have made significant progress in regaining manufacturing competitiveness and building the capabilities to be a world-class foundry.”
Over the past few years, Intel, once the industry leader in American computer chip manufacture, has found it difficult to stay up with the shift toward AI computing. Intel could not afford to make the same mistake again by failing to predict the next big tech trend after missing out on the smartphone boom of the 2010s.
However, it has mostly fallen short and has had terrible results as a result.
Major IT companies started turning to rival chipmaker Nvidia to meet much of their AI computer processing demands as the AI boom got underway in 2022.
This is because the demanding computing power requirements of AI processes are better met by Nvidia’s graphics processing unit (GPU) chips. While traditional computer-processing units, or CPUs, the type of chips in which Intel has long specialized, are better suited for simple computing activities like writing files to a disk, Nvidia’s GPUs, with their “parallel processing ability,” are able to do calculations more effectively.
The result has been an almost endless demand for Nvidia’s CPUs.
Since Gelsinger took onboard, Nvidia’s stock has increased by more than 820%, while Intel’s has decreased by 61%.
During that period, the S&P 500 increased by 54%.
Currently, Nvidia is worth over $3 trillion, while Intel’s market capitalization is at $100 billion, which is nearly 30 times less than Nvidia’s.
According to Intel’s most recent earnings report, which stated that the business was undergoing its most significant restructuring since its founding in 1968, Gelsinger had started a push to turn the company’s fortunes around.
In contrast to the award it had previously announced in March, the Biden administration last month revealed that it was cutting the size of a planned investment by $600 million. The Biden administration has attempted to promote Intel through financing from the CHIPS Act. The Commerce Department pointed out that several projects’ schedules had gone over the government’s 2030 target, but part of that was because Intel had also announced a $3 billion Defense Department contract.
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