Intel CEO Lip-Bu Tan has a long track record in the chip industry. Now he needs a big customer
Intel’s CEO Lip-Bu Tan speaks at the company’s Annual Manufacturing Technology Conference in San Jose, California, U.S. April 29, 2025.
Laure Andrillon | Reuters
When Lip-Bu Tan was named CEO of Intel a little over two months ago, he brought with him plenty of name recognition. Tan spent 12 years running Cadence Design Systems and before that was a prominent venture capitalist. He’s also held board seats at SoftBank and Hewlett Packard Enterprise.
“Lip-Bu’s Rolodex is like nobody else’s in the semiconductor industry,” Intel CFO David Zinsner said at a financial conference this month. Zinsner said Tan recently met with 22 potential customers and partners in a single day.
At age 65, Tan is going to need more than a vast database of contacts and four decades of operating and investing experience to turn around the company that put the silicon in Silicon Valley but is struggling to stay relevant in a market that’s increasingly centered around artificial intelligence.
Once the world’s largest chipmaker, Intel has lost 70% of its value since early 2020. It’s roughly flat since Tan was named as CEO on March 12.
Tan’s jam-packed schedule in large part reflects a need to change the industry’s perception of Intel. No longer the dominant player in semiconductors, Intel is trying to pivot into chip manufacturing, especially as the U.S. focuses on investing in onshoring critical technologies. Tan has been listening to customers to find out specific technical requirements they would need from Intel as a foundry, he’s said in public remarks.
Under Tan’s predecessor, Pat Gelsinger, Intel spent $90 billion between 2021 and 2024 on building the company’s foundry operations and unlocking additional U.S. government funding. Capital expenditures in 2025 are expected to reach $18 billion.
Investors, and eventually the board, lost trust in Gelsinger’s ability to generate much of a return on that investment, leading to his ouster late last year. In an industry where roadmaps and capital plans are measured in five-year increments, Tan is under pressure to start building confidence immediately.
“The foundry business, it operates at a different time scale,” said Alvin Nguyen, an analyst at Forrester. “It operates with a level of investment that is tough to stomach, and very few publicly traded companies can deal with it.”
Intel faces a plethora of other challenges that all predate Tan’s tenure. The company’s central processors, or CPUs, that for decades were the most expensive and important part in computers, have been supplanted by AI chips, primarily graphics processing units, or GPUs, from Nvidia. Meanwhile, Advanced Micro Devices has picked up substantial market share in CPUs and server chips, and Qualcomm has emerged as a big challenger as well.
Tan is working on an AI strategy under Sachin Katti, who was named chief technology officer in April after joining the company in 2021.
Tan was born in Malaysia and raised in Singapore. He moved to the U.S. in the 1970s and studied nuclear engineering at the Massachusetts Institute of Technology. He’s since touched just about every aspect of the chip industry.
Before joining Intel, he was CEO of Cadence, which makes electronic design automation, or EDA, software, widely used by engineers at fabless chip companies to design new processors. As a venture capitalist at Walden International, Tan invested in Semiconductor Manufacturing International Corporation, China’s national foundry, in 2001, and was on the board for over a decade.
He’s now betting on Intel, not just with his time but also his wallet. When he became CEO, he bought $25 million of shares, which he’ll have to hold in order to earn his full compensation over the next five years.
Tan has been keeping a fairly low profile since starting the gig in March. He’s yet to sit for a press interview, and Intel declined to make Tan available for this story. But in his two public speeches as CEO at Intel events, he’s laid out elements of his strategy.
“We need to do a better job — make it easier for all of you to use our technology,” Tan said at a foundry event earlier this month. “We will rapidly embrace industrial standards, EDA tools and best design practices.”
One big customer
The fastest way to change the trajectory would be to announce a big foundry customer. Locking in substantial orders would serve as both a vote of approval to other potential customers and a signal to Wall Street that all those expenses will soon start turning into revenue.
“One Nvidia, one Qualcomm, one Apple, one something of volume that really shows this meaningful commitment for the fab to build significant volume would really change the whole narrative,” said Daniel Newman, CEO of industry research firm The Futurum Group.
Tan’s second public appearance as CEO came in April at Intel’s Foundry Direct Connect event in San Jose, California, a few miles from the company’s headquarters. There he hinted at one of his key objectives: rebuilding confidence.
“This is a truly a service business, and that is built on the foundational principle of trust,” Tan said. “You have to be patient to earn your trust.”
Intel wafers are displayed on stage at the company’s Annual Manufacturing Technology Conference in San Jose, California, U.S. April 29, 2025.
Laure Andrillon | Reuters
At the event, populated largely by people from the insular world of chip design and manufacturing, Tan directly addressed foundry customers, discussing the company’s specific technologies in power and packaging that put it in position to take on Taiwan Semiconductor Manufacturing Company, the largest foundry in the world.
Outside the convention center, banners still hung promoting the Nvidia GTC conference, which had taken place the prior month and packed the building’s ballroom.
Tan mostly acted like an emcee, calling up the CEOs of chip design partners such as Synopsys, Cadence and Siemens, who took the stage to discuss using Intel’s technology.
A key issue for Intel to address is the broadening of its foundry, which was originally designed for its own chip design teams, meaning some of the tools and infrastructure were company-specific. Intel has given the name 18A to its chip technology that it hopes to start producing in volume this year.
“One thing about 18A was, it was developed initially as just something for Intel, and we intercepted it relatively early,” Zinsner said earlier this month. That allowed the company to develop process design kits, or PDKs, “for the industry, but it still was not from the ground up developed as a foundry node,” he said.
Zinsner said the company’s next chip generation, 14A, will be built for external customers. Analysts say that 18A may be Intel’s first foundry process that could beat TSMC’s rival process to market.
Tan also recognizes that TSMC has created an industry standard, so using the same tools and technology would allow companies to more simply bring over work from other foundries. He said Intel is making its PDK easier to use.
“My top priority is to make it easier for the ecosystem to do business with Intel,” he said.
One of the speakers at the event was Anirudh Devgan, who succeeded Tan as CEO of Cadence. Tan asked Devgan what AI chip companies need to see if they’re to build on Intel. Devgan said the most important consideration is the need to focus on what the customer wants rather than what Intel prefers.
“Intel Foundry, as you all know, is like the service business, so the customer comes first,” Devgan said. “I know Lip-Bu has very good instincts to understand what the customer wants.”
It’s a stark change in approach for a company that for decades was focused on selling its own chips and not on creating an ecosystem. In a podcast earlier this year, TSMC founder Morris Chang said that Intel, during its glory years, acted “like they were the only guy with microprocessors.”
If there was a disappointment at the Intel event, it was the lack of an announcement about a major new customer.
Zinsner previously said, in response to a question about how many customers Intel had signed up for its foundry, that the company first needs to “eat its own dogfood,” indicating that the 18A process would be primarily used by Intel itself.
Leaner company
While Tan looks outward for business development, he’s turning inward to try to fix corporate culture, flattening the organization, which grew fiercely in recent years as it staffed up to build the foundry unit.
Intel said on its April earnings call that job cuts will come this quarter, though the company didn’t provide a specific number. An Intel representative declined to comment on the matter. Intel announced in August, while Gelsinger was still in charge, that it was laying off 15,000 employees and would explore cuts in its portfolio.
Wall Street welcomes more belt tightening but warns that the company can’t cut its way to a successful revival.
Deutsche Bank’s Ross Seymour, who recommends holding the stock, wrote in a May note that, even with the “welcome and necessary cost-cutting actions,” the company’s “path to meaningful earnings/free cash flow generation remains cloudy and highly dependent on a turnaround” in the foundry business.
Equally important to Tan is getting rid of what he views as too much bureaucracy.
“It has been eye-opening for me to see how much time and energy is spent on internal administrative work that does not move our business forward,” Tan wrote, in a memo to employees in April.
He said Intel would have to learn how to do more with fewer people and that employees must be back in the office for at least four days a week by September.
“I’ve been surprised to learn that, in recent years, the most important KPI for many managers at Intel has been the size of their teams,” Tan wrote, referring to key performance indicators. “Going forward, this will not be the case.”
Tan also promoted several engineering leaders, giving him greater visibility into the organization. Zinsner said Tan has between 15 and 17 direct reports, because he wants to be closer to the “lowest” levels of the organization.
“He’s hearing the good, the bad, the ugly of what’s going on, so that he can help address those,” Zinsner said.
WATCH: Intel is dead money in its current strategic form, says Susquehanna Rolland
Technology
Palantir’s stock is up 1,700% since its NYSE debut five years ago. Here’s how it got there
People walk by a banner featuring the logo of Palantir Technologies (PLTR) at the New York Stock Exchange (NYSE) on the day of their initial public offering (IPO) in Manhattan, New York City, U.S., September 30, 2020.
Andrew Kelly | Reutersa
When Palantir hit the stock market in September 2020, there was a lot that could go wrong. The Covid pandemic was sweeping across the globe, society was in lockdown and markets were volatile.
Meanwhile, Palantir was operating at a loss while dealing with ongoing criticism over its government work, in particular with U.S. Customs and Immigration. And the company was going public through a direct listing rather than a traditional IPO.
At its opening price of $10 per share, Palantir was valued at $16.5 billion, down from its private market peak of $20.4 billion in 2015.
“It was the beginning of the pandemic, no one knew what was happening,” CFO David Glazer said in an interview. “The stock market wasn’t ripping, everyone wasn’t trying to go public, and we decided to go public as quickly as possible.”
Exactly five years later, Palantir has reached heights that would’ve been hard for even the biggest bulls to fathom.
The stock price has surged more than 1,700%, closing on Tuesday at $182.42 for a market cap of over $432 billion. That puts it among the 20 most-valuable U.S. companies, and above tech stalwarts like Cisco and IBM. Last year, Palantir joined the S&P 500, replacing American Airlines.
Quarterly revenue surpassed $1 billion for the first time last quarter, and is expected to reach $4.2 billion this year, according to analysts surveyed by LSEG, up almost sixfold from 2019. The company’s roster of customers grew from 125 in the first half of 2020 to 849 at the end of June. During that time, Palantir has added 1,500 full-time employees.
CEO Alex Karp, who founded the company in 2003 alongside notable investors like Peter Thiel and Joe Lonsdale, was exerting optimism on day one of Palantir’s life on the public market.
“We’ve reached a base where our company is very significant,” Karp, who holds a law degree from Stanford and PhD in neoclassical social theory from Goethe University in Frankfurt, Germany, told CNBC in an interview on listing day. “Being in the public space will help us with our clients and help us grow.”
Its dizzying ascent since then has perplexed Wall Street, which is unfamiliar with these kinds of multiples, especially for companies of this size.
Palantir trades for 226 times earnings over the next 12 months, with a forward revenue multiple of over 80. Those numbers dwarf even the multiples on Tesla, which trades for 194 times forward earnings and 14 times revenue over the next year.
In a report last month, Citron Research’s Andrew Left, a noted short-seller, called Palantir “detached from fundamentals and analysis.” When compared to OpenAI’s recent $500 billion valuation, he said Palantir should be priced at $40, or less than one-quarter of its current price, if it was assessed the same revenue multiple as the artificial intelligence startup.
“Karp and his team should be proud. But for investors, that’s where discipline kicks in,” Left wrote. “Comparison is the enemy of happiness, and when measured against true AI leaders, Palantir’s price already reflects success beyond its fundamentals.”
Karp, who doesn’t shy away from a dispute, recently told detractors to “exit” if they “don’t like the price.”
“We are going to be the most important software company in the world, and people will figure out what that’s valued over a long period of time,” Karp said on the day of the company’s NYSE debut.
Palantir declined to make Karp available for an interview.
Alex Karp, CEO of Palantir, attending the annual Allen & Co. Media and Technology Conference in Sun Valley, Idaho, on July 9, 2025.
David A. Grogan | CNBC
Valuation isn’t the only source of controversy. Critics have also raised concerns about how Palantir’s tools are being used by the likes of ICE and other government agencies.
Palantir was founded as a response to national security threats in the wake of 9/11. The company developed hefty software that it helped customize for clients to enable them to compile and analyze large data sets. On its website, Palantir says that it’s partnered with the U.S. Army since 2008, “embedding alongside users to design and deploy modern mission essential software solutions.”
Federal documents from April show that ICE paid Palantir $30 million to provide “real-time visibility” on people self-deporting. Earlier this year, the New York Times reported that Palantir is helping the Trump administration gather data on Americans.
In a blog post, Palantir called the reporting “reckless and irresponsible.” Karp said in a June interview with CNBC that Palantir was “not surveilling Americans.”
‘Not just about Israel’
The company has also faced backlash for providing technology to the Ukrainian and Israeli militaries.
Karp told CNBC in March 2024 that employees had left the company due to his public support of Israel, and that he expected more to leave. Palantir took out a full-page ad in The New York Times following the deadly Oct. 7 attack by Hamas the prior year that said the company “stands with Israel.”
“From my perspective, it’s not just about Israel,” Karp said in the CNBC interview. “It’s like, ‘Do you believe in the West? Do you believe the West has created a superior way of living?'”
Over the last five years, Palantir has scooped up big government deals against contractors like RTX and partnered with aerospace giants such as L3Harris and Boeing. Over the summer, the company landed a software and data contract with the Army worth up to $10 billion.
Karp has long been an unapologetic defender of Palantir’s business pursuits.
Originally headquartered in Palo Alto, California, Karp moved the company to Denver in 2020 as he grew increasingly disgruntled with what he viewed as Silicon Valley’s monoculture.
In a letter to investors ahead of its direct listing, Karp said, “the engineering elite” of Silicon Valley do not know “how society should be organized or what justice requires” and that the company shares “fewer and fewer of the technology sector’s values and commitments.”
While Palantir has been a standout performer on the market over the past five years, long-term investors had to weather some dark days along the way.
By the end of 2020, Palantir’s stock had jumped to $23.55, a gain of almost 136%. In Karp’s letter ahead of the direct listing, he asserted that “effective software can be essential to an organization’s survival” during times of crisis.
Skepticism started building in the second half of 2021. Early the following year, rising interest rates and soaring inflation pushed investors out of risky securities and into safer assets like bonds. Palantir shares lost two-thirds of their value in 2022, closing the year at $6.42, well below the direct listing price.
But November of that year brought with it the introduction of ChatGPT and a new era of AI that revived and redefined the tech industry.
Palantir launched its AI platform called AIP in April 2023. It was designed to help securely integrate large language models when dealing with sensitive data, making it much faster and more efficient for Palantir’s technology to pull in and analyze information.
The company has attributed much of its expansion in the commercial market to AIP. Government business still accounts for most of its revenue, but Palantir has attracted corporate clients such as Wendy’s and American Airlines.
Glazer said on the latest earnings call in August that the total contract value of bookings in the quarter soared 185% to $1.1 billion, with U.S. commercial revenue jumping 93% from a year earlier.
“AIP continues to drive existing customer expansion and new customer conversions in the U.S.,” Glazer said.
One customer the company cited was auto supplier Lear and a recent five-year partnership between the two. Palantir said that Lear uses AIP for help with “proactively managing their tariff exposure, automating multiple administrative workflows, and dynamically balancing their manufacturing lines.”
Palantir’s stock soared 341% last year and is up another 141% so far in 2025.
The AI is getting a lot of use in government, too.
In 2024, Palantir landed a contract to create AI-powered mobile ground stations able to collect data for soldiers using space sensors. In May of this year, the Pentagon lifted the company’s total ceiling for its Maven Smart Systems contract for AI capabilities to $1.3 billion.
Akash Jain, Palantir’s technology chief and president of its U.S. government business, said in an interview that AI has created a whole new set of risks, forcing the government to rethink how it uses commercial technologies.
“We’re perfectly positioned for the growth,” he said.
WATCH: Cramer on Palantir
The Walt Disney Co. signage on the floor of the New York Stock Exchange (NYSE) in New York, US, on Wednesday, May 7, 2025.
Michael Nagle | Bloomberg | Getty Images
The Walt Disney Company sent a cease and desist letter to Character.AI last week, warning the artificial intelligence startup to stop using copyrighted characters without authorization, a Disney spokesperson confirmed to CNBC on Tuesday.
A spokesperson for Character.AI said it removed the characters mentioned in the letter, and that “it’s always up to rightsholders to decide how people may interact with their IP.”
The spokesperson acknowledged that while some characters on its platform are completely original creations, others are “inspired by existing characters that people love.”
“We want to partner with the industry and rightsholders to empower them to bring their characters to our platform,” the Character.AI spokesperson told CNBC. “Our goal is to give IP owners the tools to create controlled, engaging and revenue-generating experiences from deep fandom for their characters and stories, expanding their reach using our new, interactive format.”
The letter serves as the latest example of how media companies like Disney are working to protect their intellectual property during the AI boom.
Disney is already involved in an ongoing lawsuit against AI image creator Midjourney, alleging that the company improperly used and distributed AI-generated characters from movies like “Cars,” “Toy Story,” “Shrek,” “The Avengers” and others.
Axios first reported the cease and desist letter.
Character.AI allows users to create and interact with character-based chatbots. Google inked a $2.7 billion licensing deal with Character.AI and hired its founders in 2024, and the startup became embroiled in a wrongful death lawsuit that same year.
The family of Sewell Setzer III, a 14-year-old boy in Florida, alleged he committed suicide after he became addicted to talking with a number of AI chatbots on the app. One of the chatbots was named Daenerys Targaryen, or Dany, who is a character in the show “Game of Thrones,” according to the lawsuit.
Character.AI is not the only AI company that’s faced scrutiny over its approach to IP.
Earlier this month, a federal judge preliminarily approved Anthropic’s offer to pay $1.5 billion to settle a class action lawsuit with a group of authors, who claimed that the company had illegally downloaded their books and others from pirated databases.
If you are having suicidal thoughts or are in distress, contact the Suicide & Crisis Lifeline at 988 for support and assistance from a trained counselor.
WATCH: Disney likely to spin off ESPN and ABC post-Iger, says LightShed’s Rich Greenfield
Daniel Rausch, vice president of Alexa and Echo, announces the Echo Studio and Echo Dot Max during an Amazon event showcasing new products in New York City, U.S., September 30, 2025.
Kylie Cooper | Reuters
Amazon on Tuesday unveiled four new smart speakers and voice-activated displays that are revamped with Alexa+, its personal assistant that’s powered by generative artificial intelligence.
The company debuted the Echo Dot Max, a revamped version of its compact smart speaker, which costs $99.99. Amazon also unveiled a new Echo Show 8 and Echo Show 11, priced at $179.99 and $219.99, respectively.
There’s also a new version of the Echo Studio, a larger, higher-end model with a more powerful speaker, priced at $219.99.
All the devices are available for preorder on Tuesday, and users will get Alexa+ early access “out of the box,” Amazon said. The Echo Dot Max and Echo Studio ship Oct. 29, while the Echo Show 8 and Echo Show 11 ship Nov. 12.
The devices were launched at Amazon’s fall hardware bonanza, held in New York. They’re the first batch of revamped products under the leadership of Panos Panay, a former Microsoft hardware leader who joined Amazon in 2023.
It’s also the first set of Amazon hardware to integrate the company’s long-awaited Alexa+, which debuted in February and has slowly rolled out in early access for some users.
“These are the most powerful Echo devices we have ever created,” Panay said on stage at the event. “Custom silicon, advanced sensors, our best microphones and sound, noise cancellation, understanding the user, faster than anything we’ve ever delivered before. They’re also beautifully designed to fade into the background.”
Alongside a revamped look, Amazon added new AZ3 and AZ3 Pro chips for edge processing to the devices, which are faster, more powerful and have “AI built right in,” said Daniel Rausch, the head of Amazon’s Alexa and Echo businesses.
Panos Panay, head of Amazon’s Devices and Services team, introduces Echo during an Amazon product event in the Manhattan borough of New York City on September 30, 2025. Amazon announced its next generation of Kindle, Ring, Blink, Fire TV, and Echo devices.
Charly Triballeau | Afp | Getty Images
The devices also feature a so-called Omnisense platform that gives Alexa “better contextual awareness,” Rausch said. It allows the Echo Show to be able to recognize users and serve up personalized insights, like an analysis of how they slept last night or alert users if they left their front door unlocked after midnight.
Amazon faces growing pressure to update its hardware and software for the generative AI age following the success of rivals such as OpenAI’s ChatGPT and Google’s Gemini. Meta also has its Ray-Ban Meta glasses, which use its Llama large language model to answer spoken questions from the user.
Amazon is also looking beyond Alexa or Echo smart speakers for opportunities in device growth.
The company in July confirmed it’s acquiring AI wearables startup Bee, which makes a wristband that can record and transcribe conversations.
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