Intel has enlisted Morgan Stanley and other advisors to assist in defending against potential activist investors, sources familiar with the matter revealed. The move comes as CEO Pat Gelsinger seeks to steer the chipmaker through a challenging period and reverse its fortunes.
Although Intel has encountered activist pressure previously, no new activist campaigns have been formally initiated, and it remains uncertain whether any activist investors have engaged with the company’s board. Morgan Stanley, which has previously collaborated with Intel—most notably during the 2022 spinoff of Mobileye—has been brought in once again to support the company’s strategic defense.
Intel’s decision to seek advisory support follows a challenging year for the company. The chipmaker lost its position as the largest U.S. semiconductor company by revenue to Nvidia, which has surged ahead thanks to its booming artificial intelligence (AI) sector. Nvidia’s market capitalization has surpassed $3 trillion, dwarfing Intel’s valuation. Intel has also fallen behind other competitors, including Advanced Micro Devices (AMD), Broadcom, Qualcomm, and Texas Instruments, in market capitalization.
The company recently announced a significant reduction in its workforce, cutting approximately 15,000 jobs, or 15% of its employees, as part of a $10 billion cost-cutting initiative. Alongside this, Intel’s quarterly financial results fell short of Wall Street’s expectations, and it has decided against paying a dividend for the fiscal fourth quarter.
Intel’s primary challenge has been its lag in the AI sector. As major cloud providers and developers of large language models increasingly turn to Nvidia’s GPUs for their most demanding tasks, Intel has struggled to maintain its competitive edge. Furthermore, Intel missed out on the smartphone boom prior to Gelsinger’s tenure as CEO.
In 2020, before Gelsinger took the helm, Third Point LLC, led by Dan Loeb, acquired a significant stake in Intel and urged the company to explore strategic alternatives to address its market share decline. Currently, Intel’s board is chaired by Frank Yeary, a prominent investment banker who previously served as executive chairman of Camberview before its 2018 acquisition.
The board faced recent turbulence with the announcement of Lip-Bu Tan’s resignation. Tan, a semiconductor industry veteran, stepped down after just two years as a director, citing personal reasons and a need to reassess his commitments. Despite his departure, Tan expressed continued support for Intel and its efforts.
