As Intel CEO Pat Gelsinger departs, intel has undergone a significant leadership change. The 63-year-old executive, who had been with the company for most of his career, is stepping down. This is one of the most challenging periods in the company’s history. Gelsinger’s exit comes when Intel is struggling, with its stock price down more than 50% this year and the company having recently cut 15,000 jobs worldwide.
Stiff Competition in the AI Hardware Market
Intel struggled against formidable rivals like NVIDIA and Advanced Micro Devices (AMD) in the hyper-competitive AI hardware market. While NVIDIA has dominated the AI chip market with its GPUs, capturing approximately 80% of the market share and seeing its stock soar by over 200% in 2023, Intel has been playing catch-up. AMD has also made significant inroads, gaining market share in data center and consumer processor markets.
Gelsinger’s renaissance strategy aimed to challenge these competitors by investing heavily in AI and advanced chip manufacturing, but the results could have been better. Intel’s stock plummeted over 50% during his tenure, compared to NVIDIA’s meteoric rise, and the company’s market capitalization dropped dramatically. The company’s revenues declined even as costs increased, with Intel reporting $54 billion in revenue in 2022, a significant drop from previous years. 
These financial challenges and the company’s inability to compete in the AI chip market effectively ultimately contributed to the board’s decision to replace Gelsinger. This signals a critical moment of reckoning for one of technology‘s most storied semiconductor companies.
The Early Days of Pat Gelsinger’s Intel Journey
Pat Gelsinger’s journey with Intel began in 1979, marking the start of a remarkable three-decade career that would define much of his professional life. As a young engineer, he joined the pioneering semiconductor company during significant technological innovation, quickly distinguishing himself through technical expertise and leadership potential. Steadily rising through the corporate ranks, Gelsinger embodied Intel’s engineering culture, becoming a quintessential “technologist” who understood both the intricate details of chip design and the broader strategic vision of the company. His early years were characterized by a deep passion for technology and an unwavering commitment to Intel’s mission, which positioned him as a rising star. By 2012, before his initial departure, Gelsinger had become a senior executive, having played pivotal roles in developing critical technologies and helping to shape Intel’s technological trajectory during a transformative period in computing history.
A Strategic Vision for AI Chip Development
Pat Gelsinger’s vision for Intel’s renaissance was ambitious and comprehensive, aimed at restoring the company’s reputation as a technological leader in the semiconductor industry. Upon returning as CEO in 2021, he outlined an aggressive strategy that included massive investments in manufacturing capabilities. He plans to spend up to $100 billion on new factories to revitalize Intel’s chip production infrastructure. Gelsinger was determined to help Intel catch up after missing the initial wave of AI chip development, positioning the company to compete more effectively against rivals like AMD.
His strategy involved not just technological innovation but a complete operational transformation. He focused on rebuilding Intel’s manufacturing prowess, expanding its foundry services, and investing heavily in advanced chip technologies. He believed in Intel’s core DNA and potential to reclaim its position at the forefront of technological innovation, promising shareholders and employees that the company’s “best days are in front of us.”
Despite his optimism and strategic vision, the plan ultimately failed to deliver the anticipated results, leading to his abrupt departure and highlighting the immense challenges of turning around a tech giant in a rapidly evolving industry.
Pat Gelsinger – A Legacy
Gelsinger’s journey with Intel highlights his long-standing commitment to the company. He joined Intel in 1979 and spent 30 years rising through the ranks before leaving in 2012. He returned in 2021 with grand ambitions, promising to restore Intel’s technological leadership and help the company catch up after missing the AI chip revolution. At the time of his return, he was optimistic, describing Intel as a “treasure trove of technologists” and expressing his excitement about leading the company forward.
However, the years since his return have been difficult. Despite Gelsinger’s strategic plans, which included significant investments of up to $100 billion in new factories, the company’s revenues declined. Gelsinger’s strategy was designed for a much larger revenue base, and the prolonged investment without immediate returns put him in an “impossible squeeze.”
Gelsinger was essentially forced out by the board, which offered him a choice between retirement and termination during a meeting last week. In the wake of his departure, Intel has announced two interim co-chief executive officers: David Zinzer and Michelle Johnston Holthouse. Interestingly, this unusual leadership arrangement might signal the board’s intention to split the company into two separate businesses.
This leadership change is particularly significant for Oregon, where Intel is the largest private employer. The company contributes an estimated $19 billion to the state’s economy and employs around 20,000 people, even after recent layoffs. The transition marks a critical moment for Intel as it seeks to regain its competitive edge in the semiconductor industry.
