In a shocking move, Intel CEO Pat Gelsinger has resigned his position as CEO as well as his seat on Intel’s board.
The resignation is effective as of December 1, 2024. Intel is currently looking for a new CEO, and in the meantime, it has appointed David Zinser – Intel CFO and Michelle Johnston Holthaus – CEO of Intel Products as interim co-chief executive officers.
Gelsinger first joined Intel in 1979 and went on to technical positions such as the lead for the 80486 processor, and eventually CTO. He spent years at EMC and then VMware as VMware’s CEO. He rejoined Intel in 2021, thought of as a saviour that could put the company back on course.
Was Gelsinger sacrificed for Intel losses?
While the press release indicates that Gelsinger is retiring, Intel lost a staggering $16.6bn dollars for the third quarter of calendar year 2024. Intel’s stock has declined 61% in the time Gelsinger has been at the head of the company. Understandably, the shareholders and the Intel Board of Directors were unhappy. The Q3 loss was the largest ever recorded by Intel. Officially, Gelsinger retired, but it’s likely he didn’t have much choice – somebody needed to be sacrificed to Wall Street.
However, other than the creation of the Intel Products group, consisting of the Client Computing Group (CCG), Data Center and AI Group (DCAI), and Network and Edge Group (NEX), plus appointing Holthaus as CEO of the group, there does not seem to be a great deal of differentiation to Gelsinger’s plans yet.
Interim executive director Frank Yeary said in the press release “With Dave and MJ’s leadership, we will continue to act with urgency on our priorities: simplifying and strengthening our product portfolio and advancing our manufacturing and foundry capabilities while optimizing our operating expenses and capital. We are working to create a leaner, simpler, more agile Intel.”.
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By GlobalDataIt is possible that the next Intel CEO will be actually bold, but there is the distinct possibility that the next CEO will be given their orders to formulate all plans only in relation to the stock price, versus the needs of its customers. Intel is a time and capital-intensive company, its products and innovations take time and planning, something Wall Street isn’t terribly in tune with.
So, what should enterprises do? Is it time to walk away from Intel or even walk away from any x86 processor?
Not really, no. Companies should already be looking at alternative x86 processors from AMD and doing due diligence about who’s chips should be in their servers. Walking away from x86 itself isn’t a reasonable strategy in the corporate data centre right now.
Enterprises need to keep an eye on Intel, but also keep in close contact with select enterprise server vendors. The enterprise server vendors, especially the big ones, will have a good read on Intel today and into the future. Consult with them as Intel changes and brings in a new CEO and lays out new plans.
Get out the popcorn and settle in to see what changes.
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