Intel CEO Pat Gelsinger reportedly forced out from flailing chipmaker after board loses faith

By: Taylor H.

Intel boss Pat Gelsinger was forced out after the board lost faith in his ability to execute a much-needed turnaround as rivals like Nvidia overshadow the once-dominant chipmaker, according to multiple reports Monday.

Gelsinger, who was named CEO less than four years ago and has spent four decades at the company, abruptly resigned Sunday after tensions boiled over at a board meeting last week, according to Reuters, which cited a person familiar with the matter.

He was given the choice to retire or be removed, and he chose to resign, multiple sources told Bloomberg, which first broke the circumstances behind his exit.

Intel declined to comment.

Gelsinger’s ouster comes after Intel was awarded nearly $8 billion in federal grants from President Biden’s CHIPS Act last week. The grants were announced earlier this year. Just months later, the company cut 15% of its 110,000 workforce as part of a cost-cutting move.

David Zinsner and Michelle Johnston Holthaus have been named interim co-CEOs as the board searches for a new chief executive. Zinsner is executive vice president and chief financial officer at the company. Holthaus is the chief executive of Intel Products, which encompasses client computing and artificial intelligence groups.

Intel shares were flat in midday trading on Monday.

As part of his turnaround plan for the chipmaking giant, Gelsinger wanted to expand Intel’s factory network and make chips for other companies – something it had never done before.

The chief executive laid out plans for an expensive new facility in Ohio, which received a large chunk of the Chips Act funds.

Ohio Gov. Mike DeWine said he hoped to speak with the new interim CEOs to discuss moving forward with the facility.

“Billions of dollars have been invested at the Ohio One site in Licking County, including multiple loads of equipment coming north from the Ohio River to the site,” DeWine said in a statement on Monday. “Now that the CHIPS Act funding has been announced, we anticipate the project will continue to move ahead quickly.”

Just last month, Gelsinger said he had a “lot of energy and passion” moving forward with the project, as well as the support of the board.

On Monday, the 63-year-old changed his tune.

“Today is, of course, bittersweet as this company has been my life for the bulk of my working career,” Gelsinger said in a statement. “I can look back with pride at all that we have accomplished together. It has been a challenging year for all of us as we have made tough but necessary decisions to position Intel for the current market dynamics.”

Frank Yeary, the board’s independent chair, will serve as interim executive chair as the company seeks a new leader.

“On behalf of the board, I want to thank Pat for his many years of service and dedication to Intel across a long career in technology leadership,” Yeary said in a statement. “Pat spent his formative years at Intel, then returned at a critical time for the company in 2021.”

In his statement, Yeary emphasized that the company knows it still has work left to restore investor confidence and deliver on advancements in its product group.

One of Intel’s main challenges has been operating in Nvidia’s shadow as Jensen Huang’s company leads the artificial intelligence chipmaker race. Nvidia has carved out a huge share of the market, taking tens of billions of dollars that would have gone to Intel in years past – becoming the world’s most valuable publicly traded company with a market capitalization of $3.4 trillion.

Meanwhile, Intel’s stock has plunged 49.7% so far this year and hit a new 10-year low in September.

Last month, Intel reported a massive third-quarter loss of $16.6 billion – a far cry from the net profit of $300 million reported in the year-ago period.

The CHIPS Act set aside $39 billion in grants, $75 billion in loans and loan guarantees and 25% tax credits to bring manufacturing jobs to the US and boost the country’s chipmaking efforts.

President-elect Donald Trump has slammed the program and its massive spending in the past.

During a pre-election appearance on “The Joe Rogan Experience” podcast, Trump said the deal was “so bad.”

Republican House Speaker Mike Johnson previously said his party will “probably” try to repeal the law, but later walked back the statement.