In a scathing internal memo, Tan slammed the company’s “suffocating” bureaucracy and reshuffled the leadership deck to put engineers back in charge.

“It’s clear to me that organisational complexity and bureaucratic processes have been slowly suffocating the culture of innovation we need to win,” Tan wrote in the memo. “It takes too long to make decisions. New ideas are not given room or resources to incubate. And unnecessary silos lead to inefficient execution.”

The data centre, AI, and PC chip divisions now report directly to Tan, bypassing layers of corporate flab that had previously slowed decision-making to a crawl. Michelle Johnston Holthaus, who formerly oversaw these groups, retains her role as head of Intel Products but will see her responsibilities “evolve and expand” 

Tan tapped networking chip boss and Stanford professor Sachin Katti as the new Chief Technology and AI Officer. Katti replaces Greg Lavender, who is retiring, and will now oversee Intel’s AI strategy, product roadmap, Intel Labs, and partnerships with startups and developers.

Tan’s shake-up comes after years of Intel floundering in the AI race, despite snapping up startups like Habana Labs. The company recently shelved its Falcon Shores AI chip project, further ceding ground to Nvidia, which has cemented its dominance in the AI chip market.

In a bid to streamline operations and shore up finances, Intel is  offloading a 51 per cent stake in its Altera programmable chip business to private equity firm Silver Lake for $4.46 billion. The sale, which values Altera at $8.75 billion, is part of Tan’s strategy to divest non-core assets and refocus on Intel’s mainstay chip business.

With Intel’s stock down nearly 47 per cent over the past year and facing new US export restrictions on AI chips to China, Tan has his work cut out for him.