Intel CEO Pat Gelsinger Under Growing Pressure As Chipmaker Evaluates Major AI Strategy Overhaul To Catch Up With Nvidia And AMD: Report – Intel (NASDAQ:INTC), Advanced Micro Devices (NASDAQ:AMD)

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Intel CEO Pat Gelsinger Under Growing Pressure As Chipmaker Evaluates Major AI Strategy Overhaul To Catch Up With Nvidia And AMD: Report – Intel (NASDAQ:INTC), Advanced Micro Devices (NASDAQ:AMD)

Amid ongoing challenges in the AI chip market, Intel Corp. INTC is contemplating significant strategic shifts to regain its competitive edge.

What Happened: Intel is evaluating significant changes to its business strategy as it faces challenges in the artificial intelligence chip market. Intel CEO Pat Gelsinger is under pressure to improve the company’s AI strategy. The board had urged Gelsinger to focus on AI, leading to the establishment of an AI Acceleration office, reported the Financial Times on Friday citing three people familiar with the directive.

Despite these efforts, Intel lags behind competitors like Nvidia Corp. NVDA and Advanced Micro Devices Inc. AMD in AI chip sales. Intel’s Gaudi 3 chips are expected to generate $500 million in sales this year, a stark contrast to Nvidia’s multibillion-dollar sales.

The company has also been hit by executive departures, layoffs, and a declining share price. Over the past year, Intel’s market value has dropped by approximately $70 billion, while Nvidia’s has surged.

Gelsinger, who became CEO in 2021, is three years into a five-year plan aimed at transforming Intel into a leading chipmaker. However, recent setbacks have led to increased scrutiny from the board.

Intel is now considering options such as an IPO for its Altera unit, selling its foundry business, and scrapping some factory projects. These potential changes come as Intel grapples with heavy spending on new factories and unmet sales targets, according to the report.

Intel did not immediately respond to Benzinga‘s request for comment.

See Also: Jim Cramer Still Thinks ‘Nvidia Could Go Lower’ But Cautions Investors Against Panic Selling After DOJ Subpoena

Why It Matters: The pressure on Gelsinger is not new. In late August, Gelsinger acknowledged investor concerns following a significant drop in Intel’s stock price, while rival Nvidia saw a 123% surge this year.

Adding to the turmoil, Intel board member Lip-Bu Tan reportedly resigned after disputes with Gelsinger and other directors over the company’s direction.

On Monday, it was reported that Gelsinger is set to present a comprehensive plan to the board, focusing on asset sales and cost reductions, including halting a $32 billion project in Germany.

Furthermore, Qualcomm Inc. is reportedly eyeing certain segments of Intel to bolster its product line, indicating potential divestitures.

Price Action: Intel’s stock closed 0.15% lower on Thursday at $19.40. Year-to-date, the company’s shares are down 59%, according to Benzinga Pro data.

Nvidia’s stock is up 123% year-to-date, while AMD has witnessed a minor surge of 0.62% in the same period.

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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote

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