Pat Gelsinger, Intel CEO, forced to resign over the company's decline
His stint at the chip-making giant has exacerbated the problems his management was supposed to fix and leaves the company with a market value 30 times lower than Nvidia.
Pat Gelsinger, presenting an Intel project.
Intel unexpectedly announced the retirement of its CEO, Pat Gelsinger. The board of directors of the iconic chipmaker offered the executive the opportunity to step back or be dismissed following the company's struggles in recent years, during which Nvidia has achieved a value 30 times greater than what was once one of the country's leading tech giants.
In fact, his departure comes before the four years required by his ambitious plan for Intel to regain the crown as the creator of the fastest and smallest computer chips on the market, an honor that was snatched by the Taiwan Semiconductor Manufacturing Company, whose products supply, among others, Nvidia.
David Zinsner and Michelle Johnston Holthaus, interim replacements
For the time being, while the board searches for a permanent replacement, his position will be filled by two interim co-CEOs to try to reorganize and redirect the company's finances and business policy. Thus, according to a statement, David Zinsner and Michelle (MJ) Johnston Holthaus, will share power in the coming dates: "Zinsner is executive vice president and chief financial officer, and Holthaus has been named to the newly created position of general manager of Intel Products, a group that encompasses the company's Client Computing Group (CCG), Data Center and AI Group (DCAI) and Network and Edge Group (NEX)." In addition, Frank Yeary, Intel's independent chairman of the board, will become interim CEO during the transition period.
The main causes of the farewell are largely due to Gelsinger's own management, Reuters reports. Despite the fact that upon his arrival in 2021, the now formerCEO received a company full of challenges, he himself contributed significantly to exacerbating them. Despite his ambitious manufacturing project and offering great artificial intelligence capabilities among major customers, the reality is that Intel "ended up losing or canceling contracts, and was unable to deliver promised products," according to a Reuters special report from October. In addition, its optimistic forecasts on potential AI chip deals that exceeded Intel's own estimates, leading the company to scrap a recent revenue forecast about a month ago.
Intel's stock plunge
After the news was made public, the company's stock fell 0.5%. Intel has shed half its value over 2024, and was overtaken by Nvidia in the Dow Jones Industrial Average in November. By contrast, rival Advanced Micro Devices (AMD), rose 3.6%, while the PHLX semiconductor index rose 2.6%.
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