Intel is Back Inside

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America is Back in Semiconductors

You can call today’s newsletter the Intel Insider edition. It has been a wild week, month and several years for the historic tech giant. 

Four years ago, I wrote an article saying that Intel is Not Inside Anymore. America’s favorite semiconductor company seemed to have lost its way. A major activist investor took a $1 billion stake in the company. Dan Loeb's hedge fund, Third Point, highlighted critical issues holding Intel back: manufacturing delays, a drain of top engineering talent, and the national security risk of losing its leadership in chip production.

Intel, a name once synonymous with computing power, was in serious turmoil for the past few years. After falling behind competitors like AMD and Apple, the company was forced to make several major changes due to external pressures.

I wrote my initial article a few weeks before Pat Gelsinger, a former Intel executive with a deep engineering background, stepped in as Intel’s CEO. I thought the move signaled a clear return to the company's tech-focused roots. I was very wrong. 

When Pat became Intel’s CEO in February 2021, the stock had been on a complete downward trajectory. This is the same period when semiconductors and Big Tech were turning around. Remember, ChatGPT was released in December 2022. Nvidia’s stock 10x’d from that moment on.

Unfortunately, Intel was facing serious headwinds from the economy, customers and the industry’s unrelenting business cycles. Semiconductor stocks can deliver very high profit margins but due to their high operating leverage, margins can disappear quite fast when markets go sideways.

However, Intel’s real headwinds came when the markets shifted from CPUs to GPUs. Nvidia invested billions of dollars so GPUs could power A.I., and it worked. Intel chose not to innovate, and was left behind. Which is why investors lost 19% over the past four years.

For context, Dell Technologies faced a similar crossroad a few years ago after going private and then public again in 2018. Dell’s major shareholders didn’t like the PC business because it was low-growth and low-margins. Michael Dell, the company’s founder and CEO, made a major bet to invest in computer servers, which are necessary to build A.I. data centers with Nvidia’s GPUs. Pivoting worked out for Dell shareholders. Not pivoting, did not work out for Intel shareholders. 

Massive Investments Propel Intel Forward

2025 has been a rollercoaster for Intel, but recent weeks have delivered a much-needed jolt of capital and collaboration. On September 18, Nvidia, Intel's longtime rival in the AI chip race, announced a $5 billion investment in Intel's common stock, priced at $23.28 per share. This deal not only makes Nvidia one of Intel's top shareholders but also kicks off a strategic partnership to co-develop AI infrastructure for data centers. 

The news sent Intel's stock soaring over 25% in a single day, adding roughly $27 billion to its market cap and marking its best trading session in months.

This follows hot on the heels of another landmark move in August: the U.S. government under the Trump administration acquired a 9.9% stake in Intel for approximately $8.9 billion (at $20.47 per share). First, the ~$20 share price was a discount to the market price. Second, the Administration has made it clear that investing in semiconductor manufacturing is a national security security. America needs to onshore domestic chip production. So far, this investment is up 50% in less than 30 days, which was worked out very well for the American taxpayer. 

From Memory Chips to A.I.: Intel's Storied History

Intel's story is a cornerstone of Silicon Valley. Founded on July 18, 1968, by pioneers Gordon Moore and Robert Noyce, the company first focused on memory chips. Its early hits included the 1103 DRAM, which became the world's bestselling memory chip by 1972. A major turning point came in 1971 with the Intel 4004, the first commercial microprocessor. This invention revolutionized computing, and by the 1980s, Intel's processors powered the IBM PC, creating the famous "Wintel" duopoly with Microsoft.

Under CEO Andy Grove, Intel shifted its focus entirely to microprocessors. He launched the iconic "Intel Inside" campaign in 1991, building immense brand loyalty. Grove also became a respected author, writing influential books on management like "Only the Paranoid Survive."

After the "Intel Inside" campaign, the company faced a decade of turbulence.

The 2000s brought new challenges and rapid leadership turnover. After Grove, a series of CEOs, including Craig Barrett, Paul Otellini, and Brian Krzanich, navigated an increasingly competitive landscape. Intel faced manufacturing delays and security issues, which allowed rivals like AMD to gain significant market share. The company's leadership instability continued with Bob Swan (2019–2021) and the return of Pat Gelsinger in 2021.

Gelsinger launched an ambitious "IDM 2.0" strategy, investing billions in new fabrication plants, including $20 billion in Ohio and €17 billion in Germany. However, mounting financial pressures, culminating in a staggering $19.2 billion net loss in 2024, led to his ousting in December of that year.

Now 2025 is a New Chapter for Intel.

After a brief interim period, Lip-Bu Tan took the helm as CEO in March 2025. He moved quickly to stabilize the company, making difficult cuts that included scrapping major European projects and closing the automotive chip unit.

By 2025, Intel stands with roughly $53 billion in annual revenue and over 100,000 employees. It is now betting its future on the AI boom, by launching new key products. While the company still faces significant execution risks, its focus on manufacturing agility and talent retention signals a determined push to reclaim its leadership position.

A.I. might give Intel a second chance at a +50 year-run in the semiconductor industry. Intel is Back Inside.