A sign is posted in front of Intel's headquarters in Santa Clara, California, on August 1, 2024.
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Intel is working with advisors including Morgan Stanley Chief Executive Pat Gelsinger is trying to turn around the troubled chipmaker to help fend off attacks from activist investors, people familiar with the matter said.
Although Intel has faced pressure from activist investors in the past, it has not formally launched a new campaign, and it is unclear whether activist investors have contacted the company's board of directors. Morgan Stanley has previously worked with Intel, including on the company's 2022 spinoff moving eye.
The sources with knowledge of Morgan Stanley's latest involvement asked not to be identified citing confidentiality reasons. Representatives for Intel and Morgan Stanley declined to comment.
Intel lost its title as the largest U.S. chipmaker by revenue last year because NVIDIA The booming artificial intelligence business has pushed it to the top. Nvidia's market value has long surpassed Intel's, and is currently valued at more than $3 trillion, about 35 times that of its smaller rivals. Intel is also lagging behind AMD, Broadcom, Qualcomm and Texas Instruments By market capitalization.
Earlier this month, Intel announced it would cut about 15% of its workforce, or 15,000 jobs, as part of a $10 billion cost-cutting plan. At the same time, the company reported quarterly results that lagged Wall Street expectations and said it would not pay a dividend in the fiscal fourth quarter.
The biggest challenge Intel has faced lately is that it has been largely left behind in the artificial intelligence wars, as large cloud vendors and developers of large language models turn to Nvidia's GPUs to handle the heaviest workloads. Before the AI boom, Intel missed out on much of the smartphone boom.
In 2020, before Gelsinger was promoted to CEO, Dan Loeb's Third Point took a sizable stake in Intel and pushed the company to explore strategic alternatives to address declining market share. Intel's board of directors is led by well-known investment banker Frank Yeary, who served as executive chairman before acquiring Camberview in 2018.
The board has experienced some turmoil this week, with semiconductor industry veteran Lip-Bu Tan announcing Thursday that he is resigning after two years on the board.
“This is a personal decision based on the need to reprioritize various commitments, and I remain supportive of the company and its important work,” Tan said in a statement. Archive.
—CNBC’s Alex Sherman and Kif Leswing contributed to this report.
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