Intel CEO Pat Gelsinger is out
Intel CEO Pat Gelsinger delivers a speech at Taipei Nangang Exhibition Center during Computex 2024, in Taipei on June 4, 2024.
I-Hwa Cheng | AFP | Getty Images
Intel announced Monday that CEO Pat Gelsinger retired from the company effective Dec. 1, capping a tumultuous nearly four-year tenure at what was once America’s leading semiconductor company but which saw its stock price and market share collapse in that time.
Intel CFO David Zinsner and Intel products CEO MJ Holthaus were named interim co-CEOs. Longtime board member Frank Yeary will serve as Intel’s interim executive chair. Shares of Intel were up nearly 4% Monday morning.
“We are working to create a leaner, simpler, more agile Intel,” said Yeary.
Yeary, Intel’s longest-serving board member, will now have to preside over yet another CEO search process. Gelsinger, 63, had an illustrious career at Intel, rising to become the company’s first chief technical officer at the turn of the century, before he took a senior role at EMC. Gelsinger returned to the company from VMware, where he was CEO, to stabilize Intel in 2021, replacing then-CEO Bob Swan.
“It has been a challenging year for all of us as we have made tough but necessary decisions to position Intel for the current market dynamics,” Gelsinger said in a press release.
Gelsinger set out an audacious plan when he arrived in 2021 to transform the languishing company into a chipmaking juggernaut. He sought to achieve parity with the two leading chipmakers, Samsung and Taiwan Semiconductor Manufacturing Company. He pursued big buildouts in the U.S. and around the world, a costly endeavor that weighed heavily on Intel’s free cash flow and increased the company’s debt load.
He also wooed government investment, positioning Intel as the single largest beneficiary of the U.S. Chips and Science Act. Government money has begun to flow to Intel in recent weeks and will aid the company’s chip fabs in Arizona and Ohio. Gelsinger’s retirement comes a week after Intel and the CHIPS and Science Act office finalized a $7.86 billion grant.
Gelsinger also moved to position the company as vital to U.S. national security. He won a multi-billion dollar contract with the Department of Defense to build secure chips, and in meetings with analysts and prospective customers stressed that Intel was a trusted partner to the U.S. government.
But all that was not enough to assuage investors, who increasingly began to see Intel’s aggressive spending as a folly.
Troubled tenure
US President Joe Biden holds a wafer of chips as he tours the Intel Ocotillo Campus in Chandler, Arizona, on March 20, 2024.
Brendan Smialowski | AFP | Getty Images
Investors became increasingly leery of Intel’s prospects, especially as the AI wave buoyed rival Nvidia and left Intel in the dust. The company’s market cap is less than half of what it was in 2021, and briefly crossed beneath $100 billion earlier this year. The company’s stock has fallen 52% year-to-date.
In August, Intel reported disappointing quarterly results, sparking the sharpest sell-off in 50 years, and said it would lay off more than 15% of its workforce as part of a $10 billion cost-reduction plan. CNBC reported that Intel had engaged advisors to defend itself against activist investors.
There is no indication yet that an activist has taken a sizable position in the company’s stock, nor any sign that overtures have been made to Intel’s board. It isn’t clear what agenda an activist would pursue at the company.
Intel revealed plans in September to turn the company’s foundry business into an independent subsidiary, a move that would enable outside funding options. That same month, Qualcomm made overtures about a possible takeover.
Gelsinger’s replacement, whenever found, will assume command of a company that is smaller and more challenged than ever before. Many of the problems Gelsinger faced were inherited: to not pursue a chipmaking mandate for Apple’s mobile devices and passing on the acquisition of Nvidia were just two of the reportedly conscious decisions that Intel’s prior leadership made that left the company at a competitive disadvantage.
Those decisions were made by Intel’s board and past CEOs. But Gelsinger’s weekend ouster raises fresh questions about the company’s governance. Lip-Bu Tan stepped off Intel’s board earlier this year, leaving the company without any directors who had semiconductor expertise. Numerous reports have emerged in the weeks since detailing a dysfunctional corporate acquisition strategy and boardroom rancor.
— CNBC’s Jordan Novet contributed reporting.
Technology
Here are the SpaceX employees who were elected to run Musk’s new company town of Starbase, Texas
The SpaceX Starship sits on a launch pad at Starbase near Boca Chica, Texas, on October 12, 2024, ahead of the Starship Flight 5 test. The test will involve the return of Starship’s Super Heavy Booster to the launch site.
Sergio Flores | Afp | Getty Images
Over the weekend, Elon Musk got his new company town along the Texas Gulf Coast. Controlling the city are three SpaceX employees, who all ran unopposed.
As NBC News reported, the election determining incorporation of the city of Starbase concluded on Saturday night, with 212 votes in favor and only six against. Just 143 votes were needed for the measure to pass.
Starbase was victorious in becoming a type C city, which in Texas applies to a previously unincorporated city, town or village of between 201 and 4,999 inhabitants. The city includes the SpaceX launch facility and company-owned land covering a 1.6 square-mile area.
The mayor is 36-year-old Bobby Peden, who has spent more than 12 years working for SpaceX and is currently vice president for Texas test and launch operations. Prior to joining the rocket maker in 2013, Peden was a graduate research assistant at the University of Texas at Austin, according to his LinkedIn profile.
Starbase has two commissioners, both from the SpaceX employee ranks.
One is Jenna Petrzelka, 39, who was an operations engineering manager at SpaceX until July, and now identifies as a philanthropist, according to her application to be on the ballot. She’s married to Joe Petrzelka, a vice president of Starship engineering and almost 14-year veteran at SpaceX.
The other commissioner is Jordan Buss, 40, a senior director of environmental health and safety for SpaceX who joined the company in 2023.
Musk, who has assumed a central role in President Donald Trump’s administration responsible for slashing the size of the federal government, began acquiring land for SpaceX in Boca Chica, Texas, about a decade ago. The first integrated Starship vehicle launched from the site, known as Starbase, in April 2023, and exploded in mid-flight.
The U.S. Fish and Wildlife Service soon disclosed details about the aftermath of the explosion, including that a “3.5-acre fire started south of the pad site on Boca Chica State Park land,” following the test flight.
State and federal regulators have fined SpaceX for violations of the Clean Water Act, and said the company had repeatedly polluted waters in the Boca Chica area. Environmental advocates and indigenous groups have also sued both the Federal Aviation Administration and SpaceX over the company’s flight tests and launch activity in the area.
Those groups said in legal filings that SpaceX caused harm to local habitat and endangered species due to vehicle traffic, noise, heat, explosions and fragmentation caused by the company’s construction, rocket testing and launch practices.
A SpaceX spokesperson didn’t immediately respond to a request for comment.
In a post on X on Saturday, the account for StarbaseTX wrote, “Becoming a city will help us continue building the best community possible for the men and women building the future of humanity’s place in space.”
WATCH: SpaceX launches third test flight of massive Starship rocket
Hinge Health’s TrueMotion feature.
Courtesy: Hinge Health
Hinge Health on Monday updated its prospectus to include the results from its first quarter, which showed accelerating revenue growth over its fourth quarter.
The digital physical therapy startup filed to go public in March, but it has not shared a price range yet. Hinge said that revenue in its first quarter climbed 50% to $123.8 million, up from $82.7 million during the same period last year. Hinge reported $117.3 million in revenue during its fourth quarter, up 44% from the same period in 2023.
Hinge said its net income for the period was $17.1 million after taxes, up from a net loss of $26.5 million after taxes during the same period last year.
The company is attempting to go public at a time of extreme economic uncertainty and market volatility, spurred largely by President Donald Trump’s sweeping tariff policy. Several companies, including online lender Klarna and ticket marketplace StubHub, have delayed their long-awaited IPOs.
Hinge’s updated prospectus signals to investors that the company is planning to forge ahead.
While the company’s revenue jumped 50%, the cost of goods sold fell slightly. That allowed Hinge to lift its gross margin to 81% from 70% a year earlier and record an operating income of $13.1 million after losing $31. 4 million in the same period a year earlier.
Hinge uses software to help patients treat acute musculoskeletal injuries, chronic pain and carry out post-surgery rehabilitation remotely. Large employers cover the costs so their employees can access Hinge’s app-based virtual physical therapy, as well as its wearable electrical nerve stimulation device called Enso.
Daniel Perez, Hinge’s CEO, and Gabriel Mecklenburg, the company’s executive chairman, co-founded the company in 2014 after experiencing personal struggles with physical rehabilitation.
Correction: A previous version of this story incorrectly stated that Q1 2025 was the company’s first profitable quarter. Hinge was profitable previously.
WATCH: IPO window likely to open in first half of 2026: PitchBook
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