| Hi from San Francisco. Intel’s challenges didn’t disappear with the departure of its top executive. But first... Three things you need to know today: • Tencent’s Path of Exile 2 became Steam’s top-selling game in key markets
• Super Micro says it found no fraud in an accounting investigation
• US Cyber Monday spending is expected to reach as high as $13.5 billion Looking for good, fast ideas | In between some of the most bullish statements made by Intel Corp. Chief Executive Officer Pat Gelsinger during his brief tenure were warnings that appear to have gone largely unheeded.
A gifted public speaker, Gelsinger tried to fire up his workforce, investors and even the government with callbacks to the role of Intel’s famous founders and a reminder of the company’s exceptional position in the chipmaking industry. But he also quietly warned that trying to put the company back where he thought it belonged would be a five-year project. He wasn’t given that long.
Monday’s announcement of his retirement, which based on our reporting was a board-driven ouster, shows perhaps short-term decision making has reasserted itself at Intel in an industry where you need a long-term strategy.
Whether Gelsinger’s plan would have succeeded will never be known. There was certainly skepticism about whether the company could ever become a leading provider of manufacturing for other chipmakers while still making its own Intel-branded semiconductors. The executive himself has been upfront in explaining that the financial payoff from that foundry effort wouldn’t start to arrive for a couple of years. And in the interim, the cost of trying to kickstart the company’s technology and build plants to attract outside customers is likely to make awful reading for Intel’s investors.
But the decision to replace him after less than four years, based on the criticism that Intel’s own product lineup hasn’t received enough attention, makes me wonder what the board expects his replacement to achieve and how quickly.
Simply put, Gelsinger was selling products that were conceived during the tenure of his predecessors. A slowing pace of innovation and an overreliance on expected manufacturing improvements that never arrived left Intel vulnerable in its existing markets. At the same time, two nascent efforts in the burgeoning area of artificial intelligence processors — investments that were also made when Gelsinger wasn’t at the company — were either the wrong bets or didn’t receive enough support internally.
Intel isn’t even in the race to compete with Nvidia Corp. to produce accelerators to power AI workloads. Tens of billions of dollars that are being spent on data center gear, money that would once have gone to Intel, is heading to a rival that has eclipsed it in sales and market value. In processors for servers and personal computers, Intel has just begun to stabilize market share losses.
Should someone at Intel have seen that AI shift coming? It’s arguable that only one person in technology did, Jensen Huang of Nvidia. His company spent years preparing new designs, software and a host of other products to put it in the position to take advantage of the huge shift in computing. High-end chip designs take years to go from concept to manufacturing in the millions.
So if Intel’s board is just now acting on the realization of these new conditions and will display a similar level of patience with Gelsinger’s successor as it did with him, the job that was once the premium role in the semiconductor industry might not be that desirable.
Intel’s board should have some institutional memory of the consequences of reactive shifts. When Brian Krzanich replaced Paul Otellini as CEO a decade ago, it was following a tough review of Otellini’s failure to get Intel into the mobile phone chip business.
Krzanich’s attempts to try to find the next big thing led him to neglect Intel’s fundamental strengths and the company lost its ability to set the industry’s direction with leading-edge manufacturing and the best processors. Krzanich’s efforts yielded little or no results in new markets and his failures as a manager undermined a lot of the competitive intensity that had made Intel so difficult to go up against. When Gelsinger returned to the company as CEO in 2021 he warned that the road back would be painful and take time. He chose the dual path of trying to restore Intel to leadership in its traditional strengths of manufacturing and high-end processors as well as remaking it as an outsourcer. Just one of those goals would have taken time and money that he ran out of. Whoever succeeds him will have less of both.—Ian King Clear, the tech company that helps US airline passengers speed through airport security, may be in danger of losing its dominance. Customers, airport managers and US transportation officials have issues with the service. SpaceX is discussing a tender offer valuing the company at roughly $350 billion. Amazon unveiled tools to make data centers more energy-efficient. Struggling battery maker Northvolt named a CEO for the lone factory that’s producing battery cells. | 
