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Bring back Pat. Was Pat perfect, no. But Pat acknowledged Intel’s problems - something Otellini, Krzanich, and Swan never did. These CEOs, all non-technical, f
by CodeHorizon 2y ago
Bring back Pat.
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.
- ekeane 2y agoI 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.
- sheepscreek 2y agoThis 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.
- throwaway48476 2y agoThat's exactly it. I'm not sure they're capable of finding or generating a wartime CEO, the rot is deep.
- brewdad 2y agoHonestly, 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.
- EFreethought 2y agoPersonally I think that buybacks should be illegal like they were before the 1980s. Companies should focus more on their nominal products/services and spend less time playing games with money.
- tliltocatl 2y agoBut 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.
- Mistletoe 2y agoWell we used to have this thing called a dividend…
- cherryteastain 2y ago> stock price is purely speculative Already is. There's a reason why many quant finance books model stock prices as martingales/random walks.
- rybosworld 2y ago> what's the purpose of the stocks at all? Dividends > dividends are highly discouraged by taxation 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.
- jdprgm 2y agoshort timelines are a death sentence in 2024
- njtransit 2y agoI think Gelsinger was fired because Arrow Lake was a total flop.
- CodeHorizon 2y agoA promised microcode update for this month has already surfaced in the wild. The Arrow Lake launch certainly didn’t make things easier for Pat.
- lxdlam 2y agoI'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. For anyone interested, https://www.youtube.com/watch?v=0m4hlWx7oRk https://www.youtube.com/watch?v=0m4hlWx7oRk.
- CodeHorizon 2y agoIn that video, Linus says he used Pat Gelsinger's book, Programming the 80386, as a reference when working on parts of the Linux kernel. It's cool to see how Pat’s work helped developers like Linus.
- GuB-42 2y ago> The real issue? The board. Full of people like Boeing execs. Literally, Gregory Smith, former Boeing CFO is a member of the board.
- lotsofpulp 2y agoThe issue then moves up to why do Intel stock owners keep voting for the same garbage board members, even after 20 years of no innovation?
- ajross 2y agoIt'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.
- lotsofpulp 2y agoMobile 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.
- bee_rider 2y agoThey did Atom. They just didn’t beat ARM.
- 2y ago
- ternaryoperator 2y agoIt'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.
- 01HNNWZ0MV43FF 2y agoNit: "they" reads better
- sheepscreek 2y agoThe 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.
- silvestrov 2y agoThe movie "Margin Call" has an excellent scene where this happends: https://www.youtube.com/watch?v=Hhy7JUinlu0 https://www.youtube.com/watch?v=Hhy7JUinlu0 It is clear how it is setup that "to survive we must act now, not in a week, and we must do this expensive sell-off" The whole movie is very well worth watching: https://www.imdb.com/title/tt1615147/ https://www.imdb.com/title/tt1615147/
- threeseed 2y agoFor me, I think it’s lazy to blame the board. There have been so many bad technical and operational decisions at Intel that are clearly the responsibility of the CEO and Senior Leadership Team. And it doesn’t require an engineering degree to understand that they missed the boat on power efficiency, AI, cloud etc.
- markhahn 2y agoNo 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...
- gyomu 2y agoIt 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.
- simpaticoder 2y agoThere 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.
- thayne 2y agoI 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.
- kevin_thibedeau 2y agoThe 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.
- adamc 2y agoI 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. People tend to hug their ruts.
- szundi 2y agoCheck 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.
- hmottestad 2y agoWasn’t Krzanich an engineer that climbed the manager ladder? He must have had technical insight.
- yvdriess 2y agoIt'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).
- computerdork 2y agoagreed, 18A is supposed to be amazing according to insiders.
- a-french-anon 2y agoAlso: https://www.semiaccurate.com/2024/12/03/why-did-intel-fire-ceo-pat-gelsinger/ https://www.semiaccurate.com/2024/12/03/why-did-intel-fire-c... (yes, even if SA is known for its hateboner for Intel)
- ErigmolCt 2y agoI 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...
- tw1984 2y agoThe real issue is beyond the board. 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.
- deleted 2y ago[deleted]
- vasco 2y ago> He poured billions into fabs in Arizona, Ohio, Germany, and Ireland Him or the CHIPS act?
- baxtr 2y agoJust 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…
- silvestrov 2y agoSteve Jobs is the exception that confirms the rule. There are so very few non-tech people who knows how to run a tech company.
- twoodfin 2y agoSteve 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.
- baxtr 2y agoI don’t think that’s true. 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.
- johnnyanmac 2y ago>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.
- fransje26 2y ago> 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.
- markus_zhang 2y agoOr, the late Capitalism. It keeps eating corporations and we can only hope that new ones come up (like SpaceX, AMD, etc.) quicker than old ones fall.
- CodeHorizon 2y agoWe 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 https://www.intc.com/board-and-governance/contact-the-board.