Tan told employees in a broadcast this week: “Twenty, 30 years ago, we were really the leader. Now I think the world has changed. We are not in the top 10 semiconductor companies.”
According to Tan, customers are giving Chipzilla a thumbs down and it's simply too far behind Nvidia to claw its way back into the AI race.
“On training I think it is too late for us,” he said, admitting Nvidia’s dominance is “too strong.”
This week saw the beginning of sweeping layoffs, with more than 500 workers axed in Oregon alone and further cuts slashing through Chipzilla’s operations in California, Arizona and Israel. The axe is swinging at its automotive unit, marketing department, and as much as a fifth of its manufacturing division.
Tan, who was parachuted in after the board booted Pat [kicking] Gelsinger three months ago, told staff the layoffs were about making Intel leaner and faster, like AMD, Nvidia, and Broadcom.
“We have to be humble,” Tan said, urging engineers to start listening to what customers actually want.
His comments were meant to be internal, but The Oregonian got its paws on the recording, revealing a surprisingly bleak assessment of Chipzilla’s fall from grace. The company’s value has halved in 18 months, now hovering around $100 billion, while Nvidia flirted with a $4 trillion valuation this week, just to twist the knife.
A company PR tried to suggest Tan’s top 10 comment was about market value, not technology, but Tan’s words tell a different story. He made the remark in answer to a question about Intel’s internal culture, not stock tickers.
While its PC side is apparently “doing a bit better,” Tan conceded the data centre business has been battered. He criticised Intel’s decision-making process as sluggish and ineffective. “The whole process of that (deciding) is so slow and eventually nobody makes a decision,” he said.
Chipzilla had once bet the farm on its new 18A process to bring customers back to its fabs. Now even that dream is looking shaky. Reuters reported last week that Tan is considering dropping outside marketing of 18A in favour of a future 14A process.
Tan didn’t confirm the shift directly, but did say, “Our number one priority is to make sure that our 18A is robust for our internal customers,” before moving on to focus on 14A as the “next frontier.”
With no serious presence in the booming AI training chip market, Tan wants to pivot toward “edge” AI, putting AI functions into devices rather than massive data centres, and “agentic AI,” where machines get on with things without asking permission.
“That’s an area that I think is emerging, coming up very big and we want to make sure that we capture,” Tan said, adding that three new vice presidents are in place to drive that shift, with more hires on the way. “Stay tuned,” he said.
