Simone Del Rosario:

Intel CEO Pat Gelsinger abruptly retired effective Sunday, the chipmaker announced Monday morning. He also stepped down from the board of directors.

Gelsinger’s history with the company goes back to 1979. He was Intel’s first-ever Chief Technology Officer in a stretch with the company that spanned three decades. After a 12-year hiatus, where he served as president and COO of DELL and CEO of VMWare, Intel brought back Gelsinger as chief in 2021 to turn the ship around. He leaves nearly four years later as that turnaround continues to flounder.

Anchor: The whole Silicon Valley idea started with Intel..
Pat Gelsinger: Yeah, the company stumbled. Still a big company. We had some product stumbles, some manufacturing and process stumbles.

Simone Del Rosario:

His retirement comes a week after Intel finalized a nearly $8 billion CHIPS Act federal grant to fund factories in the U.S. But that award was cut by more than $600 million after the company failed to meet initial promises and deadlines.

During Gelsinger’s four-year tenure as chief, Intel failed to regain major market share losses. The company also stalled out on significantly impacting artificial intelligence despite Gelsinger’s understanding of how crucial the tech has become.

Pat Gelsinger:

So I truly think about it as AI everywhere, permeating every aspect of our human existence. And much like the internet was 25 years ago, we see this era of AI bringing AI into every aspect of human existence. And it’s a thrilling time to be part of the technology community as a result.

Simone Del Rosario:

Intel’s stock has plummeted nearly 50 percent since the start of the year. Part of that downfall came from reporting a $16.6 billion loss for the third quarter, the largest in company history. It’s been a downward spiral over the decades: Intel’s valuation fell from half a trillion dollars in 2000 to just over $100 billion today.

Leadership expert Gautam Mukunda told us back in August, that Intel and Gelsinger faced similar challenges to another once-great American company, Boeing.

GAUTAM MUKUNDA:

This is what he has been trying to do, is to unwind this. But Intel, just like Boeing, spent two generations prioritizing short-term shareholder value and not investing in R&D, and it’s paying the price right now.

Simone Del Rosario:

Intel Board Chair Frank Yeary said in a statement, “Pat helped launch and revitalize process manufacturing by investing in state-of-the-art semiconductor manufacturing, while working tirelessly to drive innovation throughout the company. While we have made significant progress in regaining manufacturing competitiveness and building 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.”

But Intel’s failures aren’t just a problem for shareholders. Taxpayers are also subsidizing its quest for success.

GAUTAM MUKUNDA:
The United States must have a leading-edge fab, right? It must. It is strategically critical that it have that. At the moment it doesn’t because Intel has not been able to keep up with TSMC has not come close to being able to keep up with that. And had you at told anyone when Andy Grove was still alive that Intel would one day not be the leading chip manufacturer in the world, he probably would have killed them on the spot, right? Like just unacceptable.
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Simone Del Rosario:

Intel announced two internal leaders will serve as interim co-CEOS: CFO Davin Zinsner and Intel Products CEO MJ Holthaus. Longtime board member Frank Yeary will take on the interim executive chair seat and oversee the search for a permanent CEO to replace Gelsinger.