putilov_denis - stock.adobe.com

News

Intel CEO Tan to revamp Intel development for AI

Intel CEO Lip-Bu Tan plans to leverage AI for semiconductor design, shed non-core assets and foster a culture of innovation to turn around Intel.

Antone Gonsalves
By
Published: 01 Apr 2025

Recently appointed Intel CEO Lip-Bu Tan plans to transform the company by overhauling its traditional programming methods and using AI to design and optimize semiconductors.

In his first major keynote as CEO, Tan told customers and partners gathered at the Intel Vision conference in Las Vegas Monday that he would embrace Software 2.0. The technology, a paradigm shift in the chip industry, involves engineers training AI models to automate complex tasks and speed up the design of chips tailored for AI workloads.

"We will use AI-driven system design to accelerate the development of a new compute architecture platform," Tan said. "We have already started a deep dive with my engineering team to kickstart this transformation. We'll begin reimagining our portfolio."

Intel is far behind in the fast-growing market for AI data center chips. In February, market leader Nvidia reported $115.2 billion in data center revenue from the fiscal year ending in January. Intel has no competitive product, and its total revenue for the fiscal year ending in December was $53.1 billion.

AMD, a longtime runner-up to Intel in the PC market, is a distant second to Nvidia, but its success in AI GPUs has given it a much higher market capitalization than Intel.

Tan planned to shed non-core assets to free up resources for his AI initiative. Intel is in the process of an IPO or an outright sale of its programmable chip unit, Altera, which the company acquired in 2015 for $16.7 billion.

Back to the future

Tan promised to take the storied U.S. chipmaker back to its roots as a design and manufacturing innovator.

Intel CEO Lip-Bu TanLip-Bu Tan

"Under my leadership, Intel will be an engineering-focused company," Tan said. "One of my top priorities is to retain and recruit top talent in engineering that empowers innovation and growth."

Tan, who has been CEO for only two weeks, wants to transform the company's conservative culture into one of a "day-one startup."

"We're going to drive new ideas by giving engineers the freedom to innovate from within," Tan said. He added that he also planned to rein in the bureaucracy that stifles creativity. Tan resigned from the Intel board in 2024, partly out of frustration with the company's risk-averse culture under then-CEO Pat Gelsinger, whom the Intel board ousted last December.

Tan was equally committed to rebuilding Intel's foundry business to meet what he called his "very high bar." He said he planned to borrow from his experience as CEO of chip-design company Cadence Design Systems from 2009 to 2021.

Intel is the only U.S. company that designs and manufactures chips, making it essential to reviving the nation's chip manufacturing sector, Tan said. Intel received $7.86 billion in direct funding and $11 billion in low-interest loans under the 2022 CHIPS and Science Act that Congress passed during the Biden administration. The legislation authorizes $52.7 billion for semiconductor manufacturing, research and workforce development during the next five to 10 years.

Tan said he expects to work with the Trump administration in its efforts to re-energize chip-making in the U.S. "I'm looking forward to working closely with them to advance these shared goals," he said.

Tan's focus on restoring innovation, bolstering engineering and retaining talent at Intel was welcomed. The low-key speech lacked details, however, on how he would tackle Intel's critical challenges, such as delays in opening new manufacturing facilities and taking share from well-heeled competitors like Nvidia and Taiwan Semiconductor Manufacturing Co., the world's largest contract chipmaker.

"The lack of pomp and circumstance, the lack of excitement, and the lack of tangible details around the turnaround plan means all existing concerns from investors, customers and employees are still hanging in the air," Forrester Research analyst Alvin Nguyen said.

Tan assured the audience that he was committed to turning around Intel, saying he took the job because "I love this company, and it was very hard for me to watch it struggle."

"I simply cannot stay on the sideline knowing I could help turn things around," he said. "I also fully recognize it won't be easy."

Antone Gonsalves is an editor at large for Informa TechTarget, reporting on industry trends critical to enterprise tech buyers. He has worked in tech journalism for 25 years and is based in San Francisco. Have a news tip? Please drop him an email.

Dig Deeper on AI infrastructure