An indication is posted in entrance of Intel headquarters on August 01, 2024 in Santa Clara, California.
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Intel is working with advisors together with Morgan Stanley to assist defend itself towards activist buyers, in line with folks accustomed to the matter, as CEO Pat Gelsinger makes an attempt to show across the struggling chipmaker.
Whereas Intel has confronted activist strain prior to now, no new marketing campaign has been formally launched and it is not clear if an activist investor has been in touch with the corporate’s board. Morgan Stanley has beforehand labored with Intel, together with within the firm’s 2022 spinoff of Mobileye.
The sources with data of Morgan Stanley’s newest involvement requested to not be named attributable to confidentiality. Representatives for Intel and Morgan Stanley declined to remark.
Intel misplaced its title as largest U.S. chipmaker by income final yr, as Nvidia’s booming synthetic intelligence enterprise lifted it to the highest. Nvidia had lengthy since surpassed Intel when it comes to market cap and is now valued at greater than $3 trillion, making it roughly 35 occasions the scale of its smaller rival. Intel has additionally fallen behind Superior Micro Units, Broadcom, Qualcomm and Texas Devices by market cap.
Earlier this month, Intel introduced that it is reducing roughly 15% of its workforce, or 15,000 jobs, as a part of a $10 billion cost-reduction plan. On the identical time, the corporate reported quarterly outcomes that trailed Wall Road estimates and mentioned it will not pay a dividend within the fiscal fourth quarter.
The largest problem for Intel of late is that it has been largely left behind within the AI battle, as large cloud distributors and builders of huge language fashions flip to Nvidia’s GPUs for the heftiest workloads. Previous to the AI craze, Intel missed out on a lot of the smartphone increase.
In 2020, earlier than Gelsinger’s ascension to CEO, Dan Loeb’s Third Level took a large stake in Intel and pushed the corporate to discover strategic options to deal with market share slippage. Intel’s board is led by Frank Yeary, a well-known funding banker who previously served as government chairman of Camberview, previous to its acquisition in 2018.
The board skilled some turmoil this week, when Lip-Bu Tan, a veteran of the semiconductor trade, introduced on Thursday that he is stepping down after simply two years as a director.
“It is a private choice based mostly on a have to reprioritize varied commitments and I stay supportive of the corporate and its essential work,” Tan mentioned in a submitting.
— CNBC’s Alex Sherman and Kif Leswing contributed to this report.
