What's up: Microchip Technology to cut jobs; Super Micro says accounting review clears management; Stoli on the rocks after cyberattack; Chinese companies are now bombarding tech talent with job offers

Good morning, CIOs. The sudden exit of Intel’s chief executive, Pat Gelsinger, Monday raises questions about beleaguered chip giant’s future, its foundry business losing money, its semiconductor manufacturing process overtaken by the likes of TSMC and its reputation as America’s most storied semiconductor company usurped by Nvidia and its AI chips.

Last month, Intel was replaced by Nvidia in the Dow Jones Industrial Average.

Building up capacity to handle manufacturing chips for other companies, was core to Gelsinger’s turnaround plan for Intel, but the foundry business has lost more more than $11 billion in the first nine months of 2024—nearly double what it lost in the same period last year, the WSJ’s Dan Gallagher reports. That has led to calls by some for Intel to get rid of the business.

At the same time its business model of both designing and manufacturing chips was put to the test as an AI boom shifted demand from Intel’s CPUs to Nvidia’s GPUs. In a bid to catch up, Intel slashed costs, a move which has led to layoffs.

“Intel, in short, has no easy options, and even few very difficult ones,” says the WSJ’s Gallagher about what comes next. The chip business is complicated, to say the least, with years of research and development behind each process and product. 

Gelsinger, who had decades of experience at Intel and was its first chief technology officer, had a plan. The company Monday said it named Chief Financial Officer David Zinsner and Michelle Johnston Holthaus, general manager of Intel’s client computing group, as interim co-CEOs.

• Intel CEO Pat Gelsinger Resigns After Struggling to Turn Around Chip Maker
• Are Intel’s Problems Too Big to Fix?
• Intel’s Foundry Shake-Up Doesn’t Go Far Enough
• How Intel Fell From Global Chip Champion to Takeover Target

Cyberattack and financial troubles force Stoli’s U.S. arm to file for bankruptcy. The U.S. arm of spirits maker Stoli Group filed for bankruptcy late last week, citing an August cyberattack as a contributing factor.

A ransomware attack in August disabled the company’s primary system for tracking resources and operations and forced essential functions such as accounting into manual entry mode. The cyberattack caused “severe operational disruption” and Stoli had “issues with compliance” with Fifth Third Bank’s reporting requirements, the filing said.

Worldwide litigation by Russia, which claimed itself owner of the Stolichnaya brand in 2000, and a dispute with primary lender Fifth Third Bank also prompted the move, Chris Caldwell, Stoli Group’s global chief executive, said in a court filing.

Microchip Technology to cut jobs. The Chandler, Ariz., total system solutions provider said Monday it anticipates the job cuts to affect about 500 employees. Microchip had around 22,300 employees, according to its recent annual report filed in May.

Microsoft faces $1.27 billion antitrust lawsuit over cloud services in U.K. The lawsuit brought on behalf of multiple parties by litigation specialist firm Scott+Scott alleges that Microsoft is leveraging its dominance in must-have computer operating systems and unfairly charging business customers more if they purchase its Windows Server and use it with the tech giants’ main rivals’ cloud platforms.

GM to exit Michigan EV battery plant. General Motors is backing out of a nearly completed electric-vehicle battery plant in Michigan, agreeing to unload its stake in the new plant to its Korean partner, LG Energy Solution, the latest pullback in its electric-car investments.

Super Micro says accounting review clears management. Shares rose Monday after the company said a final review showed no evidence of fraud or misconduct by its management or board relating to accounting issues that have dragged on the stock in recent weeks. The server maker also said that it would appoint a new chief financial officer.

ICYMI: Canada says Google is creating an ad monopoly. Echoing the actions of its southern neighbor, Canada’s antitrust agency wants the search giant to sell off parts of its online ads business, the New York Times reports.

OpenAI sees ad revenue opportunity. The company’s CFO tells the FT that the company is considering an ad revenue model. The company has been making ad talent hires, the FT reports.

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