News Pat Gelsinger has advice for Lip-Bu Tan as he settles into 'one of the hardest jobs available

[Admin]

Pat Gelsinger expressed strong support for successor Lip-Bu Tan and the IDM 2.0 strategy, while acknowledging the immense financial and market pressures that made the transformation difficult.

Pat Gelsinger has advice for Lip-Bu Tan as he settles into 'one of the hardest jobs available : Read more

 

[-Fran-]

"The former CEO of Intel also criticized the short-term focus of financial markets, which he said clashed with the long-term nature of the transformation Intel was undergoing."

Ding, ding, ding, ding.

We can't have nice things because of venture capitalists being vultures in the worst of ways. Where are the incentives to keep companies thriving when you can just short them for instant big margins. Makes no sense there's no stricter regulation for it.

Regards.

 

[jp7189]

"The former CEO of Intel also criticized the short-term focus of financial markets, which he said clashed with the long-term nature of the transformation Intel was undergoing."

Ding, ding, ding, ding.

We can't have nice things because of venture capitalists being vultures in the worst of ways. Where are the incentives to keep companies thriving when you can just short them for instant big margins. Makes no sense there's no stricter regulation for it.

Regards.

I wouldnt put all VCs in that camp. There are definitely some long thinkers amoung them. I think the big problem are the casual investors and fund managers that are hunting quick profits and dont care to look deeper in the business.

Running a public company gives you that influx of funding, but exposes you to the expectations of the wankers. That's the tradeoff, and one of the reasons why many large companies stay private and some public companies privatize. Intel isn't in a position to do that.. so wankers it is.

 

[phead128]

Intel should be partially state owned if it's truly a national security asset.

 

[DS426]

Intel should be partially state owned if it's truly a national security asset.

Many companies are of national security interests in the U.S. and [likely moreso] profitable, such as Northrup-Grumman, Lockheed Martin, *scratch this one off for now* Boeing, and other Defense contractors and organizations in those supply chain webs and support providers. Intel just probably needs to get a little more in bed with Uncle Sam like those companies to lock in more lucrative contracts.

I say that as DOGE is cleaning house, so actually too late for that, lololol.

 

[DS426]

Oh and thank you author for not using the same photo of Pat G. on the excavator as it's been used a million times now.

 

[TheSecondPower]

We can't have nice things because of venture capitalists being vultures in the worst of ways. Where are the incentives to keep companies thriving when you can just short them for instant big margins. Makes no sense there's no stricter regulation for it.

Venture capitalist are by definition people who invest in startups, which is an investment that usually returns no profit at all for the first few years. Intel isn't a startup and therefore has no venture capitalist investors. The problem is the stockholders: billionares, 401k managers, and stock speculators. If you have a 401k plan your 401k manager might be pressuring Intel to make short-term gains.

 

[jg.millirem]

‘He reiterated his full support for both the board and Lip-Bu Tan as they continue forward with the IDM 2.0 vision.’

Aw gee whiz, I’m all choked up. One big corporate family.

 

[parkerthon]

Venture capitalist are by definition people who invest in startups, which is an investment that usually returns no profit at all for the first few years. Intel isn't a startup and therefore has no venture capitalist investors. The problem is the stockholders: billionares, 401k managers, and stock speculators. If you have a 401k plan your 401k manager might be pressuring Intel to make short-term gains.

Correct. And for people that think going private is better, let me introduce you to our friend Private Equity who is even more notrious for buying up middling privately held companies, burying them in debt to the hilt, charging lucrative management fees, and stripping them for parts after they don't track for a 300% ROI after 3 years. Capitalism is a brutal world. Intel is simply horribly underperforming for a company with a market cap north of 100 billion, so it's understandable they are harshly criticized for their mistakes.

As an American chip maker, I wantIntel to succeed and rise from the ashes. More recently though, I can't just dismiss the defective products, massive PR screw ups, and huge losses. Looking back historically too, they have missed so many busses(e.g. GPUs, mobile, ARM), that they are clearly where they are today due to a lack of vision by their leaders. If I'm being brutally honest, I believe they got fat and happy in the late 90's and abused their market brand dominance ever since until competition finally caught up with them. Took about 15-20 years, so when it happened, why was anyone surprised?

I don't think companies should be supported by investor money forever because of their brand or being some country's crown jewel. Using Intel as an example of how investors conspire to short a company and push it down is not a very good example. Intel has many challenges, and many of them have been there for a long time. As much as I want Intel to turn it around, it seems foolish at this point to invest in them. Forget the big money or the dumb money, it's right there on the wall. Their numbers suck and nothing about their outlook inspires great confidence. I don't think this is capitalist vultures as much as the market recognizing how bleak things look.

 

[bit_user]

I clicked on the article with a cynical mindset, thinking that his "advice" was really just a transparent attempt to rehabilitate his image. I still think that, but I don't really disagree with any of the remarks attributed to him. I do like his analogy of the "90-day shot clock", which is a basketball metaphor (for those who didn't know).

 

[bit_user]

We can't have nice things because of venture capitalists being vultures in the worst of ways.

It's not the venture capitalists, but rather the market traders. VCs actually will invest in a company with a multi-year RoI timescale, but mostly in startups and with an eye towards getting a multiple return on their investment. Once a company is publicly traded, then you have to worry about folks like day traders and those on Wall St. (i.e. big fund managers).

Where are the incentives to keep companies thriving when you can just short them for instant big margins. Makes no sense there's no stricter regulation for it.

I think part of the problem is that we no longer penalize short-term capital gains like we used to. That removed the disincentive for traders to try and make a quick buck, then dump a stock and move on.

It's politically unpopular to bring it back, but I think it's one of the easier & cheaper ways to improve the long-term health of US companies.

 

[Mindstab Thrull]

Glad to see Pat actually acting supportive of Lip-Bu Tan and Intel. A lot of people, when leaving a company, basically are "good luck, I'm going to deal with this now" and leave it at that. Pat's like, "hey look, before you get started, here's some stuff you should know and look out for. You've got this." Good move.

 

[bit_user]

Glad to see Pat actually acting supportive of Lip-Bu Tan and Intel. A lot of people, when leaving a company, basically are "good luck, I'm going to deal with this now" and leave it at that. Pat's like, "hey look, before you get started, here's some stuff you should know and look out for. You've got this." Good move.

He's not saying anything Tan wouldn't already know. These comments aren't directed towards him.

I'll agree with you on one point, which is that his remarks do seem aimed to lower the expectations for a quick turn-around by Tan. I think that's not necessarily altruistic, but should still be helpful to him.

 

[phead128]

Pat Gelsinger signed a heavily restricted non-disclosure agreement (NDA) as part of his golden parachute retirement deal. He is not allowed to say anything bad about Intel or divulge any secrets. So I would take any superfluous "Go Blue, I support Tan" with a grain of salt, since Pat and Tan butted heads before. The reality is probably Pat hates him, hates Tan's strategy, but he can't say that or there will be lawsuits.

 

[thestryker]

If I'm being brutally honest, I believe they got fat and happy in the late 90's and abused their market brand dominance ever since until competition finally caught up with them. Took about 15-20 years, so when it happened, why was anyone surprised?

It was the mid-00s when the board started getting more financial focused people with no clue about the industry and it got worse since then. There's no surprise at all regarding the shift when the people with control care more about maintaining quarterlies.

 

[aberkae]

He sure has a lot to say these days. Almost every other day there is another article of him sharing his opinions due to his successful career. 🤪

 

[Alvar "Miles" Udell]

The biggest problem with Intel is all their failed experiments that cost a fortune and either underperformed and were killed after as little as one generation or never saw the light of day, and their 5 nodes in 3 years push again cost an unnecessary fortune because they didn't want another 14nm++++++++++ repeat.

 

[PixelAkami]

Many companies are of national security interests in the U.S. and [likely moreso] profitable, such as Northrup-Grumman, Lockheed Martin, *scratch this one off for now* Boeing, and other Defense contractors and organizations in those supply chain webs and support providers. Intel just probably needs to get a little more in bed with Uncle Sam like those companies to lock in more lucrative contracts.

I say that as DOGE is cleaning house, so actually too late for that, lololol.

Ehhh, don't like this way only because some people are scared that the Orange man up in the house supposedly might pull CHIPS funding which even though Intel is a massive company, could still suffer heavily ONLY because of how expensive foundry stuff is.... especially if you fall behind like Intel did.

 

[Mr Majestyk]

Intel should be partially state owned if it's truly a national security asset.

So Amuricans do want communism. I knew it all along!

 

[Pierce2623]

Wall Street kills tech companies. The fact that they fire CEOs for taking a loss now to improve the future shows EXACTLY what the problem is. Pat was charting the ONLY course where Intel could maintain its position. Being able to do everything at a competitive level made them a massive juggernaut and if the company had stuck to engineering principles instead of Wall Street principles they’d be where Nvidia is.

 

[mikeebb]

There was a time when a company taking a current loss in order to improve future profits was fine ... as long as it was clear that was the goal and there was a reasonable chance of reaching it. You have to spend money to make money. Being bigger usually just meant that there were more places in the balance sheet and accounts to bury losses. With modern transparency (at least to those who can pay for access to the information, from 3rd parties), it's harder to hide the losses today, and large investments in any case can't be hidden.

It used to be a Good Thing to make such investments, which are a sign, really, of an intent to stay in business. However, the "90-day shot clock" that Pat mentions has become all-important today, making longer-term investments (in the US) problematic. Essentially, what you did for me yesterday is history (and I can be vindictive if I didn't like it); what you are doing for me today is important; what you will do for me tomorrow is most important; beyond tomorrow is speculation.

Then there's Good vs Bad Private Equity (not Venture Capital, which is actually long-term - by Wall Street standards - in outlook). We hear mostly about Bad Private Equity, which essentially dismantles companies for cash, leaving the surviving (if there are any) parts loaded with debt and doomed, mostly, to go bankrupt themselves. Let's call them wrecking companies or scavengers or something equally low on the desirability foodchain (though necessary to clean up, sometimes). They also have similarities to those predatory towing companies we hear about from time to time.

There's also Better Private Equity, which can sometimes remove companies from the "shot clock" pressures of Wall Street to redevelop themselves - sort of late-stage venture capital. An example of that was BNSF railroad (a huge, but only modestly profitable, company) being taken private by Berkshire Hathaway (an even huger company) for its potential long-term benefit to the holding company; one result has been significant capital investment in the railroad that would likely not have been made as a separate public company on Wall Street (because of that shot clock driving financial decisions) - the holding company could see the need for the investment to maintain and improve market position and make money for the Big Company on a continuing basis. I could see Intel eventually being in that position, but it would be a large chunk to swallow even for a Berkshire (bigger than that railroad). Wonder how much Intel stock Berkshire holds (which is probably possible to find out, if you subscribe to the right data services), and how it votes its shares (the latter, it's impossible to know)?

 

[bit_user]

Wall Street kills tech companies. The fact that they fire CEOs for taking a loss now to improve the future shows EXACTLY what the problem is. Pat was charting the ONLY course where Intel could maintain its position.

Pat over-promised and under-delivered. Intel was way off its guidance, lately, and far underperforming its peers, in part due to failure to execute on things that had nothing to do with his IDM 2.0 strategy. You cannot do that and expect to stick around for long. Anyone who has any business being CEO of a company 1/100th as big should know that.

I was very supportive of Pat and his plan, in the early days. However, I grew increasingly disenchanted as his spin started to diverge from reality and Intel just couldn't seem to do anything right. Not Sapphire Rapids, not Alchemist, not Raptor Lake, not Ponte Vecchio, not Meteor Lake, not Intel 20A, not Gaudi, and not even Arrow Lake. All of those failures, in spite of how drastically he cut back the business and got out of industries like storage and FPGAs. And, on the flip side, name one thing that Intel has done during Pat's tenure that exceeded expectations.

If Pat had set realistic expectations that were in line with his plans, and actually met them, I would be up in arms if the board had gotten rid of him. Sadly, Intel's execution has been shambolic, under Pat. I don't fault him for causing all of the organizational rot which lead to so many massive failures, but he failed to understand Intel's capabilities and ensure their plans were in line with them (or effectively remedy the situation), and he failed to properly set investor expectations.

He has no legs to stand on, other than his dream. I don't know if anyone could've successfully executed on it, but Pat sure didn't!

 

[thestryker]

I was very supportive of Pat and his plan, in the early days. However, I grew increasingly disenchanted as his spin started to diverge from reality and Intel just couldn't seem to do anything right. Not Sapphire Rapids, not Alchemist, not Raptor Lake, not Ponte Vecchio, not Meteor Lake, not Intel 20A, not Gaudi, and not even Arrow Lake. All of those failures, in spite of how drastically he cut back the business and got out of industries like storage and FPGAs. And, on the flip side, name one thing that Intel has done during Pat's tenure that exceeded expectations.

Sure you listed a bunch of stuff that happened while he was CEO, but the only things that can be remotely linked to his tenure are 20A cancelation, ARL and the Gaudi pivot. Being annoyed by him being a cheerleader isn't the same as him being an incompetent leader.

The 20A cancelation makes sense if they weren't lying as to the reason why which we'll find out by the end of the year. In turn ARL's mediocrity certainly wasn't helped by N3's clock scaling and the very conservative default settings.

That leaves the Gaudi pivot and quite frankly the entire AI strategy as a mess which I think is fair to pin on him. Should have picked a strategy and backed it if for no other reason than long term support.

The other thing that may be linked to him was the over buy of DUV equipment, but I don't recall ever seeing when those purchases were made.

At the end of the day he was given a giant sinking ship, provided a plan and was booted before that original plan timeline even passed. All of this happening in an industry where the decisions are made years in advance. If 18A is what it's supposed to be we'll know he was nothing more than a scapegoat.

 

[bit_user]

Being annoyed by him being a cheerleader isn't the same as him being an incompetent leader.

I already clearly explained that someone in his position needed to understand the gap between their capabilities and their promises and close it by one means or another.

That leaves the Gaudi pivot and quite frankly the entire AI strategy as a mess

Not just a pivot, but a failure to execute to their plans and capitalize on the ravenous AI market, due to it being late (esp. if you include software) and under-performing.

More importantly than any of those individual failures, companies like Intel issue guidance about their expected financial performance. Aside from all the execution failures I listed, Intel missed its guidance quite badly, in 2024. That's a no-no, and Pat knows it.

 

[bit_user]

Pat Gelsinger signed a heavily restricted non-disclosure agreement (NDA) as part of his golden parachute retirement deal. He is not allowed to say anything bad about Intel or divulge any secrets. So I would take any superfluous "Go Blue, I support Tan" with a grain of salt,

I'm pretty sure Pat still has a large chunk of Intel stock. His best chance for a big pay day is if Tan can successfully execute on Pat's vision, or something relatively close to it. Other than ego, Pat has a lot of reasons to be supportive and want Tan to succeed. And if he does, you can bet Pat will take some credit for it.

But yeah, we're not going to get any straight talk out of Pat. Not for a long time, at least.