8 ways Intel can still pull itself out of free fall after its CEO’s forced exit

When Pat Gelsinger returned to Intel as CEO in 2021, it was heralded as the start of a redemption arc. After more than 30 years with the company, including his tenure as CTO during its golden age, Gelsinger seemed uniquely qualified to tackle Intel’s mounting challenges. His mission: restore the company to its former glory as a leader in chipmaking and manufacturing.

But less than four years later, that redemption story has ended. According to sources cited by Bloomberg, Gelsinger was forced out — a stunning turn for one of the industry’s most respected technical minds. His sudden departure raises tough questions: Why couldn’t Gelsinger complete the mission he was seemingly born to lead? And if Intel’s most capable steward couldn’t turn the ship around, what hope does the company have in a market dominated by Nvidia, Qualcomm, and TSMC?

Also: The fall of Intel: How gen AI helped dethrone a giant and transform computing as we know it

Gelsinger’s ousting isn’t just about one leader. It’s a symptom of a company that has lost its way. His departure is a wake-up call for Intel to confront its cultural stagnation, address its legacy dependencies, and embrace the transformative changes required to stay relevant in a rapidly evolving industry. Without decisive action, Intel risks becoming a relic of its own storied past.

1. Gelsinger’s exit highlights Intel’s cultural stagnation

Gelsinger brought credibility and a bold vision to Intel but he couldn’t overcome the cultural inertia that has plagued the company for years. Intel’s internal dynamics have become a major roadblock. Bureaucratic bottlenecks, risk-averse decision-making, and an overreliance on legacy systems have significantly slowed innovation.

Also: I switched from Intel to AMD – here’s why I’m never going back

I’ve spoken with engineers who describe Intel as a place where risk-taking is discouraged and new ideas are often met with skepticism. In contrast, companies like Nvidia, Qualcomm, and Apple thrive on experimentation and rapid iteration. Gelsinger’s technical expertise alone wasn’t enough to resolve these systemic issues.

The next CEO must prioritize cultural transformation. This involves empowering engineers, reducing red tape, and fostering a sense of urgency. Consider what Satya Nadella accomplished at Microsoft: he transformed a slow-moving giant into one of the most agile and innovative companies in the world. Intel requires a similar cultural revolution to unlock its full potential.

2. x86 dependency: Both strength and weakness

x86 has been Intel’s core product for decades, powering PCs, servers, and enterprise systems. However, as the industry shifts toward AI, cloud-native computing, and energy-efficient designs, x86 is beginning to seem outdated. Arm-based processors are now dominant across a range of devices, from smartphones to cloud servers, and Apple’s M-series chips have demonstrated that Arm can surpass x86 in both efficiency and performance.

Also: If Intel can’t come up with a Qualcomm-killer soon, it’s game over for x86 PCs

That said, x86 is not yet obsolete. Legacy applications in enterprise environments still rely heavily on x86, and it remains popular among gamers for its capability to deliver high frame rates. However, those markets are gradually shrinking. At the same time, competitors like Ampere are proving that Arm servers can manage data center workloads with lower power consumption, while companies like Nvidia are pioneering new approaches to high-performance computing.

Intel’s challenge is clear: it must protect its x86 foundation while aggressively transitioning to new architectures. If it fails to adapt, x86 risks becoming a niche product, potentially leaving Intel behind in an industry increasingly prioritizing scalability, efficiency, and flexibility.

3. Foundry services: Intel’s best bet – or biggest gamble

Intel’s venture into contract chip manufacturing through Intel Foundry Services (IFS) represents one of its most ambitious moves in recent years. The semiconductor industry urgently needs alternatives to TSMC and Samsung, especially given the geopolitical tensions that underscore the dangers of relying heavily on Asia. On paper, Intel is well-positioned to fill this gap.

However, the journey to becoming a leading foundry is challenging. Intel’s advanced manufacturing processes, such as the 18A node, have experienced delays, and gaining customer trust remains a significant hurdle. TSMC is not only ahead in technology but is also a reliable partner for companies like Apple, AMD, and Nvidia.

For IFS to be successful, Intel must demonstrate its ability to deliver results on par with or better than TSMC. This requires meeting deadlines, offering competitive pricing, and establishing strong relationships with prominent clients. The funding provided by the CHIPS Act gives Intel an advantage, but this is a high-stakes risk. If IFS does not succeed, it could result in another setback for Intel.

4. AI hardware: Intel’s missed opportunity

The future of computing is centered around artificial intelligence (AI), with Nvidia at the forefront. The company’s GPUs are the dominant force in AI training and inference workloads, and its Grace Hopper platform is specifically designed to manage the complex, parallel tasks that AI requires. Apple is also heavily investing in AI through its custom silicon.

Also: Today’s AI ecosystem is unsustainable for everyone but Nvidia, warns top scholar

In contrast, Intel has struggled to establish itself in this area. While the 2019 $2B acquisition of Habana Labs was a positive move, the outcomes have been disappointing. Qualcomm is advancing AI-powered PCs with its Snapdragon X series, and AMD is working with Microsoft on custom AI chips.

For Intel to remain relevant, it needs a clear and aggressive AI strategy. This could involve developing memory-safe architectures like CHERI or concentrating on edge computing. The company must act swiftly to adapt to this rapidly changing landscape.

5. Betting boldly on Arm and RISC-V

Selling its xScale Arm business in 2006 — just a year before the introduction of the iPhone and two years before Android-based devices hit the market — was one of Intel’s biggest strategic mistakes. Arm-based architectures now dominate everything from smartphones to cloud servers, and companies like Apple and Qualcomm have shown that Arm can scale effectively for high-performance computing. Meanwhile, RISC-V is gaining traction as an open-source alternative, particularly in the IoT and edge computing sectors.

Also: Why Intel can no longer live in denial

Although Intel has explored RISC-V through partnerships with SiFive, it has not fully committed to either Arm or RISC-V. This hesitation could prove to be a significant mistake. To effectively compete with Qualcomm and Apple, Intel must embrace a multi-architecture future.

This strategy could involve acquiring Arm startups, developing its own Arm-based products, or investing more heavily in RISC-V. Intel can no longer afford to rely solely on x86 architecture. The industry is evolving, and Intel needs to take the lead — or risk being left behind.

6. Leveraging geopolitics for strategic advantage

Geopolitical tensions have transformed semiconductors into a national security concern, and Intel is uniquely positioned to capitalize on this shift. The CHIPS Act provides billions in funding for domestic semiconductor manufacturing, offering Intel an opportunity to take the lead in this sector.

However, merely constructing fabrication plants (fabs) is not enough. Intel must also develop advanced manufacturing processes that can compete with TSMC and Samsung in terms of price and performance. Expanding into regions like Europe and India could help diversify Intel’s supply chain, thereby reducing geopolitical risks and creating new opportunities.

If Intel can successfully navigate these challenges, it could become an indispensable player in the global semiconductor ecosystem. Nonetheless, the margin for error is very slim.

7. Leadership: The key to Intel’s survival

With Gelsinger no longer at the helm, Intel is facing a leadership void at a crucial time. The company requires a CEO who can inspire confidence, tackle complex challenges, and implement ambitious plans effectively.

This situation goes beyond mere technical expertise; it hinges on vision. The right leader must confront Intel’s cultural stagnation, accelerate its transition to AI and Arm technologies, and restore trust with customers and investors. Without strong leadership, even the best strategies are likely to fail.

8. The unthinkable solution: Selling Intel to ensure its legacy

It may seem radical, but what if Intel’s best option is to sell? For instance, Qualcomm could benefit from Intel’s manufacturing capabilities to scale its Arm-based products and compete with Nvidia in AI and data centers. Intel’s fabs would give Qualcomm the infrastructure it needs to operate more quickly and efficiently.

However, selling Intel wouldn’t be straightforward. Regulators would scrutinize the deal, and the company’s role as a national security asset adds complexity. Still, in a landscape where speed and focus are crucial, selling to a more agile player might be the only way to preserve Intel’s legacy.

Sic transit Gelsinger

Pat Gelsinger’s exit marks a turning point for Intel. The challenges ahead are daunting, but they’re not insurmountable. Whether through cultural transformation, bold pivots to new architectures, or even a strategic sale, Intel must act decisively — and soon.

The semiconductor industry isn’t waiting for anyone. Intel has a choice: adapt and lead, or fade into irrelevance.