Intel’s newly appointed CEO, Lip-Bu Tan, is spearheading a significant transformation aimed at revitalizing the company’s financial health and strengthening its position in the competitive AI sector. Since assuming leadership on March 18, 2025, Tan has initiated strategic changes to address Intel’s recent challenges, including its first annual loss since 1986 and increasing competition from industry leaders like Nvidia and AMD.
Leadership Restructuring and AI Focus
One of Tan’s initial actions was to streamline Intel’s leadership structure. He has flattened the hierarchy, allowing major divisions such as data center, AI, and PC chips to report directly to him. This move aims to eliminate bureaucratic inefficiencies and accelerate decision-making processes. Additionally, Sachin Katti has been promoted to Chief Technology and AI Officer, taking over from Greg Lavender. Katti will oversee Intel’s AI strategy, product roadmap, Intel Labs, and partnerships, signaling a renewed focus on AI development.
Divestment of Non-Core Assets
In a bid to streamline operations and focus on core competencies, Intel has agreed to sell a 51% stake in its Altera programmable chip business to private equity firm Silver Lake for $4.46 billion. This divestment is part of Tan’s strategy to shed non-core assets and strengthen Intel’s balance sheet. Altera, which accounted for just 3% of Intel’s 2024 revenue and posted a $615 million operating loss, will be deconsolidated from Intel’s financials once the deal closes in the second half of 2025.
Manufacturing Overhaul and Foundry Expansion
Tan is also focusing on revamping Intel’s manufacturing operations. Historically, Intel manufactured chips exclusively for itself, but under Tan’s leadership, the company aims to expand its foundry services to external clients, including Nvidia, Microsoft, and Amazon. This strategic shift is designed to enhance production efficiency and attract high-profile customers, positioning Intel as a leading contract chipmaker.
Financial Turnaround and Future Outlook
Addressing Intel’s financial challenges is a top priority for Tan. The company reported a $19 billion annual loss in 2024, prompting the need for decisive action. Tan plans to implement cost-cutting measures, including potential job reductions, particularly within middle management, to create a more agile and responsive organizational structure. He is also emphasizing customer feedback to guide Intel’s turnaround strategy, encouraging clients to provide honest assessments of the company’s performance.
Looking ahead, Intel aims to develop a new AI chip architecture by 2027, with the upcoming Panther Lake chips, utilizing the advanced 18A process technology, serving as a critical test of the company’s manufacturing capabilities. Tan’s leadership marks a pivotal moment for Intel as it seeks to reclaim its position as a leader in the semiconductor industry.
