Intel Responds to Nvidia Competition with Cutback Plan
With increasing competition and the difficulty of entering the emerging artificial intelligence market, American giant Intel is in the midst of a deep corporate crisis. In this light, the tech giant is preparing to take drastic measures ahead of the board meeting scheduled for mid-September.
According to Il Sole24Ore, CEO Pat Gelsinger and top management are reportedly preparing a plan that could include selling its Altera programmable chip unit and abandoning the $32 billion mega-factory under construction in GermanyThese interventions represent a rather significant restructuring, aimed at making the company leaner and more reactive.
One step Intel has already taken is the separation of its design and manufacturing activities. Since the first quarter of this year, the company has begun to report financial results for the two divisions separately. This separation is intended to ensure that customers’ technology secrets are protected, preventing confidential information from being misused.
A deep crisis
Growing competition, especially from Nvidia which dominates the AI chip market with a market cap of $3 trillion, has put pressure on the tech giant. In comparison, Intel’s market cap fell below $100 billion after a particularly negative second quarterwhich led to the suspension of dividends and a 15% reduction in staff, with the aim of saving 10 billion dollars.
The September board meeting will be crucial for Intel’s future and will determine whether or not the tech giant will be able to turn around and regain a prominent position in the semiconductor industry.
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