I just finished reading the new shareholder letter from Intel’s freshly appointed CEO, Lip-Bu Tan, and I genuinely had to pause and ask myself: wait, didn’t Pat already say all of this?
The letter talks about accelerating the turnaround, focusing on customers, driving execution, cutting costs, and leaning hard into Intel’s IDM 2.0 strategy — the exact same themes we’ve heard from Pat Gelsinger for the last four years. There’s mention of 18A, Panther Lake, Nova Lake, Clearwater Forest, the foundry + product integration staying intact, and the importance of AI workloads and rack-scale systems.
It’s all there. The language might be a bit more “operational,” a little less inspirational, but it’s clearly the same blueprint.
Lip-Bu even references the 15% workforce reduction — which, to be clear, happened last year under Pat. He frames it as a necessary step, one that they’ll keep building on with ongoing cost-cutting and “portfolio simplification.” So far, though, no radical changes have been announced. It’s more like a continuation with maybe a slightly sharper knife.
The thing is: both Pat and Lip-Bu are engineers. They’re close in age. Neither one is exactly Steve Jobs in the charisma department. Both believe in Intel’s potential and have made it clear they want to keep the foundry and product businesses under one roof. Both are committed to heavy capital investment while streamlining operations. The core philosophy hasn’t changed.
And look — I get it. You can’t pivot a ship like Intel overnight. After four years and billions poured into foundry strategy, fabs, and long-term bets, no new CEO is going to walk in and say, “Let’s cancel everything.” That’d be insane. So of course Lip-Bu is going to continue most of it, at least for now.
But that’s what makes this feel strange. If the board was going to go as far as firing Pat — a public, major move — you’d expect something more than a change in tone or pacing. You’d expect a new direction. A clear shift in strategy. Something bold. But that’s not what we got.
So the only conclusion I can draw is that this wasn’t about the what, it was about the who. Maybe the board got impatient. Maybe they lost confidence in Pat’s ability to execute. Maybe there was a personal or operational disagreement behind closed doors. Could’ve been politics, or Wall Street pressure, or just frustration with the stock performance. Who knows.
But from the outside, it feels like they replaced the pilot without changing the flight plan.
Personally, I think Pat should’ve been given the full five years — maybe even more — to see his turnaround through. Four years just doesn’t feel like enough for the kind of deep transformation Intel is attempting.
Curious what others here think:
- Was this about execution speed or internal politics?
- Can a leadership change like this actually make a difference if the strategy is the same?
- And does it make you feel better or worse about Intel’s direction going forward?
Pat was arrogant. He didn't know how to get 3rd party fab customers. Nvidia, AMD, Apple did not trust him. He comes from the old Intel regime when it was all roses and Intel was at the top of the world. He didn't realize that Intel was at the bottom and it needed to do whatever it took to win customers.
Here's Morris Chang's opinion of Pat Gelsinger:
Chang said he found Pat Gelsinger’s attitude to TSMC “hostile”, adding he had been friends with Bob Noyce and Gordon Moore and been close to many Intel CEOs but not to Gelsinger.
Previously Chang has described Gelsinger as “discourteous” and “a bit cocky”.
Here's what Tan said recently:
Tan said the company needs to listen to prospective outside customers for its factories and let them specify the design and manufacture of their products, rather than Intel dictating the way it will be done. Tan said many large customers want custom parts — and his company will do it for them.
This is clearly a shot taken at Pat, who did not know how to win fab customers.
Lastly, Pat hired a ton of people. Intel increased employee count under his watch while revenue decreased by 50%. Tan wanted to cut way more. Pat didn't.
So while the strategy is similar, Pat's execution was severely lacking.
I think Pat enforced his dismissive optimism on the entire company which made a tough job even tougher. A number of Intel executives, new and old, have taken indirect shots at Pat when he got pushed out even before Tan came on board.
I still see a lot of people worship Gelsinger just because he was supposedly the engineer CEO messiah that Intel needed. But he had a flawed strategy made worse by naive, arrogant execution.
Thanks! That’s a really interesting perspective. From the outside, it’s hard to get a full view of how Pat was perceived by potential foundry customers or what was happening inside the boardroom. I actually watched Lip-Bu reading from the teleprompter at that recent Intel conference, and yeah, maybe I see what you’re saying. The tone felt more grounded compared to Pat.
The only sad part is… it feels like Lip-Bu might now need another 4–5 years to fix things.. . basically restarting the clock.
>It’d be more impressive if these predictions were shared beforehand
It’s hard to disagree with that.
Based on your comment above, it sound like “the receipts” are messages between you and one other person. Messaging a prediction to a friend is very different than publishing it for the world to see.
Was Pat perfect, no. But Pat acknowledged Intel’s problems - something Otellini, Krzanich, and Swan never did. These CEOs, all non-technical, focused on dividends, buybacks, and next-quarter results while Intel fell behind in advanced nodes and innovation.
Gelsinger inherited a disaster: 10nm delays, TSMC pulling ahead, and no GPU strategy. He had the courage to cut buybacks and slashed dividends. He poured billions into fabs in Arizona, Ohio, Germany, and Ireland. He delivered Intel 18A, powered on first silicon, released PDK 1.0 for Microsoft, and secured Microsoft and Amazon as customers. There were even rumors Apple might join.
Contrast this with Nadella at Microsoft back in 2014. He didn’t reboot the company by tearing everything down. Instead, he built on Ballmer-era wins like Azure, Office 365 while shifting Microsoft’s focus to the cloud. Gelsinger had to start from scratch in many ways, tackling years of neglect while facing harsher challenges.
Yes, Intel’s stock dropped $150 billion, but Gelsinger was upfront - it wouldn’t turn around before 2025. He was trained by Gordon Moore and Andy Grove, and while some saw him as arrogant, that confidence came from decades of technical leadership.
The real issue? The board. Full of people like Boeing execs. They don’t get engineering. Trusting them to fix Intel is like hoping a plane door won’t pop open mid-flight. They’re the ones who should be replaced.
From Fabricated Knowledge[0]:
"Meet Greg. He’s the former CFO and EVP of operations at Boeing. He’s been on the board since 2017 and was an interim CEO at Boeing during 2020. He also sits on the American Airlines board and is Chairman there. He sits on the Sierra Nevada Space Corporation board as well.
He has almost no semiconductor experience and could probably be directly involved with the Boeing fiasco. He’s been on the board for the entire Intel disaster and, at one point, was interim CEO of Boeing, so he's likely not the most focused member."
"Most large investors vote alongside Glass Lewis and ISS recommendations, the two most prominent proxy solutions for investors. Most GL/ISS recommendations tend to vote with the board and don’t change much unless something drastic happens. If you’re a passive investor, you vote in line with the two proxy powerhouses."
>If you’re a passive investor, you vote in line with the two proxy powerhouses.
As a passive investor in SWPPX, an S&P 500 index mutual fund from Charles Schwab, "my" Intel stock votes are whatever Charles Schwab deems appropriate.
This is the correct answer. People still don't realise just how much power over virtually every public company in America (and therefore the economy) is concentrated in the hands of a handful of people at Vanguard you've never heard of, for example.
For those who may not be aware of what you are talking about: 3 fund companies (BlackRock, State Street, Vanguard) are the largest shareholder in over 80% of SP500 companies and collectively own around 28% of the SP500 market cap.
> Also, how did Blackrock get so wealthy so fast? They've only been around since 1988.
It is not their money. They have roughly $11.5 trillion of assets under management, but their market cap is only $161.5b (on net income of about $6b). Compare that to xAI, which has existed for less than two years and has a valuation around $50b.
I am interested in learning about what you are referring to, but you linked his entire Substack and Twitter account. Would you please link a specific post?
Yes. If they collectively decide stock price matters more than anything else (sustainability, the planet, long term viability of the business), they get it, whatever the short or long term costs.
There was a comparison between Amundi (France based) and BlackRock, and their voting patterns, and BlackRock was consistently voting against any ESG or in any way ecology related proposals. Anything that isn't directly about making more money is just not their thing. Contrast that with Amundi who overwhelmingly voted for ESG or similar measures.
Electronic trading and passive investing drove commissions to zero so Blackrock helped create ESG because ESG requires paying commission for the service of certifying an investment as ESG.
It's been a concern that I've had for a bit - if everyone recommends index funds, then you lose a lot of the underlying "value" behind them. You have fewer people making decisions about what stocks to buy. You get this really top heavy system.
It's not like most of the people making those decisions are doing any better than just throwing dice at a wall and seeing what sticks.
In the immortal words of Warren Buffett and Jack Bogle respectively: "The stock market is a device for transferring money from the impatient to the patient." and "The daily machinations of the stock market are like a tale told by an idiot, full of sound and fury, signifying nothing."
You can either gamble and blame yourself or ride the market (invest in index funds) and excuse yourself from losses. If you're just interested in making some money using some disposable cash, it makes even more sense to just ride the market.
Broad market index funds are the inflation protected asset due to US federal government bailout. Your savings account is not going to keep up with inflation, nor are TIPS or US treasuries (not for land/healthcare/education), but an SP500 fund will do a better job over the course of decades.
TIPS are literally designed to track inflation, Treasury I-Bonds are also designed to track and surpass inflation.
The US total stock market (ex-US stock market is a crapshoot) and its subset the S&P 500 index will generally do a better job than any bonds given a long enough timeframe, but that doesn't mean appropriate bonds can't do the job either.
That is why I specified land/healthcare/education. I guess I should have specified that it matters more for metropolitan areas, especially high cost of living regions.
TIPS won’t come close to making one be able to compete with other buyers in those markets for the non mass produced/imported resources.
If someone invested their money in TIPS over the last 30 or 40 years thinking they will be able to buy real estate because TIPS protected them from inflation, they would have been sorely disappointed for pretty much all non Midwest/interior northeast metros.
This is a demographic/political issue for all developed countries, they must reduce the purchasing power of their currency as a tax to be able to deliver the benefits expected by the more populous, older voting populace.
> If someone invested their money in TIPS over the last 30 or 40 years thinking they will be able to buy real estate because TIPS protected them from inflation
Does that change the reality that a 1997 30 year TIPS would have been ineffective at helping purchase what was once a below $100 per square foot home in 1997 that is now $300+ per square foot in most US population centers?
Replace home price change (or land price change) with education price change or healthcare price change. Probably even trades’ worker price change.
If a nursing home cost $x per month in 1997, and you thought putting away an equivalent amount of cash in TIPS will ensure you can afford a nursing home in 2027 or 2037, it’s probably not going to be fun to find out how much they cost now.
It worked great if you wanted to ensure being able to buy electronics, other manufactured goods, and probably groceries. But those are beneficiaries of automation and foreign labor.
3.6% annual return since Dec 2003. 1.036^20=2.0286.
Home prices have more than doubled since then, for a large portion of the US. Source for that is going to Zillow, searching a home in a major metro, and looking at price history.
Ok fair enough. But please explain like you might to a child, since these fund managers are exercising their power and since they are picking short term focused, parasitic, extractive boards like the Boeing/Intel ones, what impact are they trying to have on their funds? What fruit will the Vanguard 3030 fund reap when Intel and Boeing tank, say, maybe this year?
A fund manager can throw their weight behind short term gains, and when those gains dry up they can sell their Intel stake and put it in the next company to be sucked dry. They don’t have to care about long term success.
Fund managers are obligated to act according to their fund's prospectus[1], of which the specifics will vary with each fund.
For a TDF (Target Date Fund), because that was brought up (Vanguard 2030): Both actively and passively managed ones must generally be managed such that shareholders can start withdrawing adequate funds (selling shares) upon and after reaching the "target date".
For an S&P 500 index fund like the one I mentioned and hold (SWPPX), the fund manager is required to imitate the actual S&P 500 index as much as reasonably possible.
In short, "don't have to care about long term success" is not a generally usable argument for fund management.
If the prospectus says "follow the S&P 500" the fund manager is also not interested in long term success, they are interested in tracking the index.
But the fund managers tracking an index are not the main problem, they are just putting a lot of passive votes behind the funds that are actively working on electing board members in the interest of short term growth/profit (which brings more people to invest in their funds and gets them big bonuses).
You have to sell before the “gains dry up”, otherwise you won’t have much money to invest in a new company to have enough of a voice to suck it dry.
But for an index fund, there is no fund manager choosing when and if to sell. The investors of the fund are just following the markets, not really earning a lot (in real terms), but also not losing much.
It's not 20 years. Just 12 years ago Intel was launching Ivy Bridge on 22nm and was absolutely on top of the world.
It's true they've completely fallen off the pace. But people tend to forget how rapidly this happened. Even as late as the semi-aborted 2018 launch of Cannon Lake it seemed like it was just a routine burp they'd correct with a process respin. Then TSMC quietly reached parity with 7nm, shipped 5nm which was a better process, and by 2021 Apple had jumped ship and Intel was falling behind even AMD.
The disaster happened fast. Boards of Directors aren't that agile.
The 2017 "launch" of Cannonlake wasn't something that anyone inside or outside of Intel could have reasonably considered to be a "routine burp". It was a desperate move to avoid shareholder lawsuits and possible criminal prosecution. Intel had to ship something under the 10nm label before the end of the year, because they had made far too many (false) promises that 10nm would be working Soon. Cannonlake was a mostly-broken chip because their 10nm process did not work, and Intel never even tried to make significant revenue from it or ramp it to volume production (though they kept promising for months that they were going to ramp). And it was still two years late.
Meanwhile, Intel's chip designers kept targeting an unusable process, and wasted years that they should have been iterating on designs for the fab process that actually worked. Skylake shipped in 2015. They didn't deliver a new CPU microarchitecture on 14nm until 5.5 years later, a year and a half after they shipped that same microarchitecture in a mobile-only form when their 10nm finally started to be somewhat usable (but not fast enough for desktop).
What were the chip designers doing for all those years? In 2015, Intel knew that 14nm had been harder to bring up than any previous fab process, and they knew that 10nm was proving even harder, but they refused to try making an updated CPU design for 14nm. How could the management not have realized that spending multiple consecutive years not shipping new designs would cause long-term damage to their capability to iterate on CPU designs? Not participating in the feedback loop of actually shipping left Intel with an oversized P-core design and an E-core design that wasn't well-matched to it, making Alder Lake awkward and slapdash when they finally got 10nm working well enough for desktop CPUs.
Sure ... THIS is what I don't get. Non-technical (ie. CEO + board before Gelsinger) people are responsible for a technical disaster. They did not, of course, stop creating new technical disasters. Which ended in complete panic and Pat Gelsinger on top.
They complain about arrogance, but even if you accept that, it was arrogance BEFORE Gelsinger, with Intel under the control of MBAs that they're talking about.
And can I just say, I've seen some seriously arrogant assholes in the tech departments I've worked ... but for absolute incredible arrogance, you need MBAs.
There was always a deep cultural problem in Intel - at least since otellini when I was there. But it's not just the management that was arrogant - engineers too were a bit arrogant because they were taught that Intel was the best. The cultural problem was Intel assumed that they did not need to look outside the company about how the world and tech landscape was changing, and really they assumed they could always depend on the semiconductor process advantage to cover design inefficiencies. So the whole company was living in the past. Plus they did not hire the best - either in terms of thought leaders or in terms of senior people who were really really innovative. Intel had or has this culture of hiring lots of recent college graduates who would push new designs that were iterative but they were not of the level of new patents, or truly an outcome of research. Whereas amd was being successful with a much smaller number of employees, because of new patents and hired mostly senior people.
Once Intel lost its research focus it became an extractive company extracting the riches that were already there, instead of creating true innovation. Case in point - Intel stopped doing it's research day long time ago.
Design pipelines are deep and Intel at the time famously had very node-specific designs without industry-standard PDKs. The moment engineers were told to switch a design to 14nm, it basically reset the 5 year design-to-product pipeline. Management failed because they did not hedge the risk by starting a parallel 14nm design effort at first sign of 10nm troubles. They likely were engaged in magical thinking or some variation of the "Are YOU going to tell him?" Silicon Valley scene. It does not help that information like that is considered actionable insider trading information. I bet a lot of people working on 10nm designs first heard the news about the delays from the quarterly investor calls.
> Design pipelines are deep and Intel at the time famously had very node-specific designs without industry-standard PDKs. The moment engineers were told to switch a design to 14nm, it basically reset the 5 year design-to-product pipeline.
Right. It was well-known publicly that Intel was running their business in a way that maximized the damage any fab troubles would have on their product roadmap. It was obvious a decade ago that Intel needed more flexibility to bring their CPU designs to other fab processes. It took them too long to start working on Rocket Lake, and too long to deliver it. But they have at least made some progress on the problem, since they've been selling x86 CPU cores made at TSMC for the past year.
(On a related note: Buying Altera and forcing them to port their entire roadmap over to a broken 10nm process was made even more stupid by the fact that Intel didn't have a usable PDK that outsiders and acquisitions could work with.)
The "even" makes the tone of your comment feel a tiny bit disrespectful towards AMD. By 2021, it was clear to me that AMD had their gloves off and were winning. Zen 3 was released in 2020 - the third generation of nearly flawless execution by AMD that Intel failed to respond to - outside of cutting the prices on some CPUs. For a while, Intel held onto the "fastest single-core speeds". Back in 2017, my first thought after being blown away by the performance of a first-gen Zen PC build was "I should buy shares in AMD" - AMD clearly had a superior product with an even better value proposition.
I think the point is that Intel had such a lead in the Bulldozer era that for AMD to overtake them was a tremendous failure.
I would not say that the first gen of Zen is was a clear winner over Skylake. It took a couple iterations before AMD clearly took the lead. AMD was simply so far behind that several large generational improvements were needed to do better than Intel.
> I would not say that the first gen of Zen is was a clear winner over Skylake.
In 2017, I would not have said that either for Zen 1 without qualification[1]. Zen 3 on the other hand, was a winner.
That said, 1st gen Zen had better bang-for-buck than Intel, for multicore workloads - in my case, I had built a workstation and thr equivalent intel build would have cost much more, expensive Ryzen motherboards notwithstanding.
1. In my comparison as I buyer, I didn't compare Intel and AMD processors by core count, but by what I'd get with my budget. The AMD build I eent with was better than an intel build for the same amount of money.
Mobile phones were picking up a lot of steam by the mid 2000s, and it doesn’t seem like Intel bothered to even investigate developing more power efficient chips.
Seems like the leaders just lost the stomach for taking risks, a long time ago. No forays into mobile or GPUs, at least not in the billions of dollar and many years scale that was needed. No stomach to pay the competitive salaries necessary to compete with Apple, Microsoft, Alphabet, Meta, Amazon, Netflix, etc for talent.
They did as recently as 2016 and then gave up on it: "Intel could be on the verge of exiting the market for smartphones and standalone tablets, wasting billions of dollars it spent trying to expand in those markets. The company is immediately canceling Atom chips, code-named Sofia and Broxton, for mobile devices, an Intel spokeswoman confirmed."
(https://www.pcworld.com/article/414673/intel-is-on-the-verge...)
Yeah, Otellini famously turned down Steve Jobs' request to make the chip for the first iPhone, thinking the market wouldn't be big enough. When he got pie in his face, he tried to correct course. By the time he needed to retire, the board wanted to give up on mobile, thinking they would never catch up, and double down on data center.
AFAICT, this was a self-serving bit of reverse myth-making from Otellini. If there really had been a single binary decision Intel got wrong—saying no to Jobs when they might have said yes—then their collapse looks like bad luck: Nobody bats 1.000.
But the way Apple insiders tells this story, there was no way Intel was even being considered in the (short!) window when the original iPhone was being built. Intel was in the middle of selling Xscale, and even that design was too power-hungry.
Intel missing mobile was a long history of poor strategic and tactical choices, not one bad call.
Jobs had two iPhone teams working in secret against each other, and was setting up things on the side. He likely approached Otellini before either team was far along.
They did more than investigate. Nokia, at that time still market leader in mobile phones, wasted a lot of time and effort because management wanted them to move to Intel. Nokia engineers did not believe that Intel would ever reach the required power efficiency. Whether it was self-fullfilling prophecy or just technically impossible is anyone's guess. (No, Nokia did not fail because of Intel, but that miss certainly made the disaster more complete.)
Intel connection was not the sole reason for Nokia's demise in phones, but it contributed on the failure of their effort to recover from the tailspin. Symbian their old mobile platform was clearly due to be replaced and they had a pretty viable in-house Linux platform, Maemo, that already shipped with N900 in 2009. Instead of iterating on that, they decided to "join forces" with Intel and merged Maemo with Intel MobLin to create MeeGo. They wasted at least a year on that and not with a lot to show for it as the Intel chips they planned for never materialized.
Obviously it was going to be very difficult to compete as a third platform with the behemoths iOS and Android become during those years. At least the MeeGo and Windows Phone cards were not the winning ones.
That's the software part of the story, which became fully public in form of MeeGo.
But there was also a hardware story how Nokia would start Intel silicon. I don't think anything of that has ever been publicly annouced before it failed. Wasting a year seems to be massive underestimate. I believe it must have been much longer. After Nokia started to fail Intel hired former Nokia engineers. I have no reliable insights what they did there, but I believe at least in the beginning they still worked with phone hardware on low-level software.
Atom has always been a laptop chip. They tried to shoeshorn it to handhelds but it sucked for obvious reasons.
Think Apple's chips started in iPhone, then iPads and finally very recently ramped up to Macbooks. Even Snapdragon has only very recently released a laptop worthy chip because of the design they've acquihired from Nuvia.
"didn't beat" puts it mildly. Every attempt Intel made at entering the smartphone business was doomed because they were years behind ARM. Paul Thurrott confirmed this with HP when discussing the Elite x3 smartphone:
The true embarrassment was when SMIC (read: China) reached 7nm and thereby surpassed Intel last year (or was that 2022?).
Intel then proceeded to waste CHIPS monies and other aid on five digit layoffs and now ousted the one CEO who ostensibly at least had the right idea.
At this point I want to see Intel fail (and Boeing too), American Exceptionalism(tm) absolutely needs to have its longass Pinocchio nose broken in half before we have any hope of rebooting ourselves.
As in many large projects, even more so with a large company,
the point is not to react when the problems are happening,
it is to preempt these problems, foresee them and prevent their happening.
So indeed, by 2018, even though Intel has not yet fallen, it's actually already late.
The roots of the problems seems to be earlier, and that's where the CEO, and the Board, should have reacted.
So the boards don't have totally unchecked power. But despite that policy being 22 pages long, it doesn't pay any attention to companies' individual circumstances.
Vanguard's voting policy doesn't have an opinion on EA's lootboxes, or Intel's 18A node, or Disney's approach to Star Wars.
You can’t easily dismiss the problem by pointing to history.
In those historic times, stock ownership was much more restricted to rich investors (not a good thing) who are far more opinionated in AGMs (a very good thing) than some faceless index fund or Robin Hooder who doesn’t even realize they should vote at all.
So boards used to perform but they also used to have pressure to perform. Will they still perform on autopilot? Maybe, but chaos always wins unless there’s a forcing function (your votes at the AGM).
> So when a company's ownership reaches 50%+ of index funds
well luckily, this isn't the case. And most index funds do ask index fund holders for the vote, tho not individually. But if the majority holders end up not following the board recommendations, the index fund would vote that (at least with vanguard - not sure about others).
Great, that. However the point of capitalism is that people who know the business would invest and make good decisions. In the situation that index funds hold most of the capital accountants will be making all decisions.
The point of capitalism is that the businesses that have people who know the business and make good decisions eventually win out over the businesses that don’t.
The way modern stock ownership is structured makes it almost impossible for shareholders to exercise any meaningful control.
Shareholders have no access to insider, commercially confidential information - so shareholders don't get to change the captain until after the ship's hit the iceberg. If I have shares in a video game company and the inept boss didn't organise enough testing so the game's got loads of major bugs? Well, I only find out after the damage is done. Is Gelsinger fucking up the delivery of 18A? I have no idea!
Meanwhile, individual shareholders' power is incredibly diffuse. The smart investor has a diversified portfolio, and even if I've literally got a million dollars invested in Intel, I still only own 0.0011% of the company.
Maybe I should coordinate with the other investors, you say? Get together with 1000 other similar investors, and we've got 1% between us? It's impossible, because they're all anonymous. There isn't anywhere I can rally the other shareholders.
And on top of that, loads of companies have dual-class share structures specifically designed to stop shareholders having any say. Whether you're invested in Facebook, FitBit or Ford - good luck exercising control when insiders' shares have 10x the votes yours have.
And that's without getting into passive investors and pension funds.
If I don't like Intel's current board, just selling my shares is far, far simpler than exercising any sort of meaningful active governance.
Note this is only true for companies registered under US law, especially under Delaware law. (And UK law to a lesser extent)
Which puts the onus of proof on the minority shareholders, to demonstrate they have a bonafide need for such information.
Most US states do so, which ironically makes the US one of the most authoritarian and dictatorial countries when it comes to minority shareholder rights.
Compare it with say Japan or China where the onus of proof is on the company to demonstrate why the requests of minority shareholders should be denied.
And the only real restriction is that any group of shareholders making such requests have to own at least 3% to 5% of the total shares.
The ETFs actually do own the underlying securities and vote the shares. They typically have a mechanism for ETF owners to vote internally on how to vote externally, but the vast majority of ETF owners ignore it so whatever the ETF recommends (which is often from a third party) almost always is what happens.
The board might've been deliberately planted there to tank the stock in the long run.
Wouldn't be the first time hedge funds do this, but to be fair they prefer small pharma (famously cancer research/meds) startups or generally smaller companies to do it. Wouldn't be surprised though.
I've watched the talk in 2022 between Linus and Pat. It's a common talk as a company PR but I think Pat showed me that he is a real engineer to drive this huge and years-old company, not the Wall Street managers.
It seems that “Non technical people don’t belong in management at technical companies” is an impossible lesson to learn for many, no matter how rich or credentialed.
There should be representation in management from every realm in which a company does battle on a complex field. A technical company should have strong representation from engineering, but it cannot and should not neglect lawyers in various specialties (tax, tort, labor) and include those knowledgable in finance, marketing and (when applicable) the supply chain. The members should ALL have "leadership" pixie dust. A companies leaders need to have insight and experience in every domain in which the firm faces either existential threat or growth opportunity.
I think the takeaway should be that if we want Western economies to keep growing, we need to cut these useless rich bureaucrats out and give power to the engineers.
Elon is an idiot but has a gift for convincing people to spend money building new things, particularly physical. There's a lot of people who could do great things if the funding was available and not just thrown into unicorn wannabe startups.
I’m convinced a long term successful business needs a >50% owner dictator who’s focused on more than the next quarters dividend payout. That sole owner dictator doesn’t even need to be particularly smart. They can play Diablo all day for all it matters. They just need to be able to make decisions that are longer term than the next balance sheet which the traditional executive class and shareholder structures are failing to do.
I don't think that is necessarily true. But if you are non-technical, you need people advising you that are technical and actually listen to their advice.
The problem with non-technical decision makers is that they will mostly listen to the MBAs who think like them and not the technical people. They tend to waste their time on stupid things to prop up their egos, compensating for lack of understanding of their business fundamentals and what direction to go in.
I wonder whether that is a more general problem. E.g., maybe technical decision-makers tend to listen to other engineers and not give enough considerations to financials and market expectations.
Check out X these days. There is this "founder mode" meme that is about company founders are the culprit of growing bigger and fix how the company works.
Imho this is bullshit. It is not about being the founder, but most people just cannot change their ways of working. Like hired managers would not be able with the same chance. At the same time, when founders or engineers cannot change to accomodate some business reality, only time will tell wether they can and manage to lead through that - or the McKinsey usual mantra "selling off unprofitable business unit" would have been proved better.
I was inside since Otellini (left last year). Otellini at least 'stayed the course' reasonably well. I never felt like the company was going to GROW, but at least not die.
BK is who did his best to sink the company, multiple mis-guided layoffs, bad top level hirings, and stupid direction changes every time he read a new news article. Don't even mention his absurd AMA on reddit where he couldn't stop using the ellipse and laughing like a 14 year old girl.
Bob Swan wasn't the guy who could right the ship. He was another Otellini type guy, someone you bring in to not mess stuff up. Pat was a great pickup for Intel, and his return was my first time hoping that Intel could actually survive and grow.
Unfortunately, he came by too late. Foundry STILL hadn't really made progress, and the rot in the rest of the company had set in too far. The brain drain from BK was still being felt everywhere.
Frankly, I still feel like Pat was the right guy, 10 years too late. He joined to right the ship, but by the time he came aboard, the ship had already hit the iceberg, and the bow was 30 feet in the air. And now he's being blamed for the ship sinking.
This is a great answer. Pat is not a wartime CEO. He could have been fantastic for Intel if the company was somewhat healthy and the competition was not so fierce.
Just a small side comment: I don’t think that being technical and focusing on the right things are equivalent.
There are examples of people like Steve Jobs who knew how to surround themselves with the right technical people without being too technical themselves.
And then there are also the technical leaders that ignore the business side…
Steve Jobs wasn’t a programmer, but he was absolutely a techie. Go watch some of his marketing and keynote videos from the NeXT days: He understood the technology and more importantly why it mattered to the product and customers.
Also, think about the corollary: if that was true then most certainly the opposite is also true that technical people are terrible at business decisions.
Hardly my experience. Some are, but some are excellent business people.
>the opposite is also true that technical people are terrible at business decisions.
I'd say thst is generally true, yes. That's why the CTO isn't the CEO.
The big issue people are hinting at is that there's not much balance in this C suite these days. Just a bunch of people who all put money first, that isn't the CFO.
It's not the size of the technical insight that matters, it's what you know what do with it. Point being, a smart and capable CEO can still have misaligned incentives (read: optimize for personal benefit).
It's very, very difficult to shrink a public company until the board fully accepts that it has to happen.
The problem Gelsinger faced is one that many similarly placed CEOs face. A company is bloated when they come in; they have to make the company smaller; they become the sacrificial lamb for reducing its size and temporarily its income; so another CEO is brought in who recognizes the need to do the same thing; they are also fired; finally, the board brings in a white knight (typically someone with a moniker like "Chainsaw Al") who makes them see that the company has to shrink even more to get the turnaround. That CEO gets to keep the job and, if successful, win all the plaudits.
The point you’re missing is urgency. Convincing the board is also an important part of the CEOs job. They need to use all the tools at their disposal. They have to build the necessary relationships to smoothen out the board approvals for their plans. Better yet, they could reach out to major shareholders, pitch their plan to them, and use their influence to get the board in line. There is more than one way to achieve this. Pat must have tried some of this but didn’t succeed.
I think the question isn't just whether Gelsinger was wrong for Intel... It's whether Intel is capable of empowering any leader to do what’s necessary to rebuild...
Honestly, I think the thing that got Pat fired was agreeing to suspend stock buybacks for five years as part of the CHIPS act money deal. The Board needs to be able to prop up their investments.
What changed in the 80’s is that a safe harbor was created. Before that companies were at risk of being charged with market manipulation - there were no clear rules on what was market manipulation and what wasn’t.
The safe harbor rule 10b-18 simply laid out requirements for buybacks fell into a “safe harbor”, presumed to not be market manipulation.
But companies could still do them before that, but it was more risky.
But if buybacks are illegal and dividends are highly discouraged by taxation, what's the purpose of the stocks at all? How are stockholders supposed to get paid back if there is no flow of money from the companies? And no, "sell stocks for higher price to a greater fool^W^W^W another investor" cannot work on global level because if the company doesn't distribute it's profits to stockholders, stock price is purely speculative so it essentially becomes a Ponzi even if the is real value production getting done, because the value production doesn't find it's way back to the investors.
This is only true today because buybacks aren't taxed
Buybacks are ultimately a way of saying "we don't have a better way to spend this money." Consider that, in a world without buybacks, execs have two choices. One is to pay dividends, and eat the tax implications. The other is to find productive ways to spend the money to increase the company's earnings. The taxation of dividends strongly motivates companies to innovate. Buybacks weaken that motivator significantly, because there's no tax implication. It's financial engineering and not a productive use of money.
Buybacks are also a pretty neat way for insiders to enrich themselves at the expense of shareholders.
Example:
Insiders schedule a sell of their shares to occur right after announcing a buyback plan.
Worth noting also that dividends aren't uniquely taxed. Worst case, they're taxed the same as income, but they can also be capital gains which are taxed at a lower rate.
So any talk of incentives should include a justification of passive investment being more valuable than work for income, if someone is asking for favorable tax treatment.
Wasn't aware of that. Yes, I've no clue what I'm talking about. But if buyback gains are also taxed as income when cashing out, what is the advantage of buybacks then?
You can defer selling capital gains for decades in a buy-and-hold portfolio, while your portfolio continues to grow. Dividends are always taxed in the current tax year. One benefit here for investors is that you can defer taking capital gains until years when you are in a lower tax bracket (e.g. retired), which you cannot do with dividends. (The US capital gains tax rate is progressive, if with fewer buckets than income. There's a 0% bucket, a 15% bucket, an 18.8% bucket, and 23.8% bucket.)
My point was that GP's assertion that "Worth noting also that dividends aren't uniquely taxed" is wrong - they are uniquely and specifically taxed, the rate just happens to currently be the same as capital gains rates.
> These CEOs, all non-technical, focused on dividends, buybacks, and next-quarter results [..] The real issue? The board. Full of people like Boeing execs. They don’t get engineering. Trusting them to fix Intel is like hoping a plane door won’t pop open mid-flight.
And that economical model of maximum profit we have "chosen" as a society is exactly why we are possibly heading towards failure, as western societies and as economic entities in the very near future.
The problem is that once the cracks start to show, whether at Intel with the current crisis or at Boeing with doors blowing out and airplanes crashing due to gross negligence, so much engineering excellence and knowledge has been lost that the tide is pretty much impossible to stop.
Enshitification, whether applied to online platforms or to consumer goods is a similar expression of the same problem. Once the quality is lost, the rot has set in and there is simply no way back for the companies involved.
No offense, but what you say sounds like an argument for the tech approach.
Intel didn't lose the cloud, and what you describe as power efficiency was the fab/euv problem (that Pat fixed). AI: okay, but are you sure that Intel should aim to own every market? What if Intel fabs produce a lot of AI chips for fabless vendors?
No one has offered any real explanation for why the board would do this, now. 18a is about to go to hvm, which would carry large gains for server and consumer products, in addition to third parties. some mention "not listening to customers", which is peculiar, since customers (defined by current and past revenue) want faster, cheaper products (18a). about the only think I can imagine is that the board wanted a lower defect rate on large foundary chips (a potential product, not relevant to current products, except perhap Gaudi and maybe Altera). but firing Pat isn't going to improve defect rates...
If what you described above is true, well, good luck for competing with China's semiconductor sector given the US government is on its all out war with China on semiconductors.
Surely the Chinese can repeat what they achieved in EVs.
We may not have the power to fire anyone, but the overwhelming support for Pat shows we can still make an impact. Let the board know they made a mistake and leave a record of it: https://www.intc.com/board-and-governance/contact-the-board.
The letter talks about accelerating the turnaround, focusing on customers, driving execution, cutting costs, and leaning hard into Intel’s IDM 2.0 strategy — the exact same themes we’ve heard from Pat Gelsinger for the last four years. There’s mention of 18A, Panther Lake, Nova Lake, Clearwater Forest, the foundry + product integration staying intact, and the importance of AI workloads and rack-scale systems.
It’s all there. The language might be a bit more “operational,” a little less inspirational, but it’s clearly the same blueprint.
Lip-Bu even references the 15% workforce reduction — which, to be clear, happened last year under Pat. He frames it as a necessary step, one that they’ll keep building on with ongoing cost-cutting and “portfolio simplification.” So far, though, no radical changes have been announced. It’s more like a continuation with maybe a slightly sharper knife.
The thing is: both Pat and Lip-Bu are engineers. They’re close in age. Neither one is exactly Steve Jobs in the charisma department. Both believe in Intel’s potential and have made it clear they want to keep the foundry and product businesses under one roof. Both are committed to heavy capital investment while streamlining operations. The core philosophy hasn’t changed.
And look — I get it. You can’t pivot a ship like Intel overnight. After four years and billions poured into foundry strategy, fabs, and long-term bets, no new CEO is going to walk in and say, “Let’s cancel everything.” That’d be insane. So of course Lip-Bu is going to continue most of it, at least for now.
But that’s what makes this feel strange. If the board was going to go as far as firing Pat — a public, major move — you’d expect something more than a change in tone or pacing. You’d expect a new direction. A clear shift in strategy. Something bold. But that’s not what we got.
So the only conclusion I can draw is that this wasn’t about the what, it was about the who. Maybe the board got impatient. Maybe they lost confidence in Pat’s ability to execute. Maybe there was a personal or operational disagreement behind closed doors. Could’ve been politics, or Wall Street pressure, or just frustration with the stock performance. Who knows.
But from the outside, it feels like they replaced the pilot without changing the flight plan.
Personally, I think Pat should’ve been given the full five years — maybe even more — to see his turnaround through. Four years just doesn’t feel like enough for the kind of deep transformation Intel is attempting.
Curious what others here think: - Was this about execution speed or internal politics? - Can a leadership change like this actually make a difference if the strategy is the same? - And does it make you feel better or worse about Intel’s direction going forward?