Intel Gets a New CEO to Oversee Its Turnaround Efforts

Summary

WSJ Tech News Briefing: Intel Gets a New CEO to Oversee Its Turnaround Efforts

Podcast Information:

• Title: WSJ Tech News Briefing
• Host: Shara Tipkin
• Author: The Wall Street Journal
• Episode Title: Intel Gets a New CEO to Oversee Its Turnaround Efforts
• Release Date: March 14, 2025
• Description: Tech News Briefing is your guide to what people in tech are talking about. Every weekday, we bring you breaking tech news and scoops from the pros at the Wall Street Journal, insights into new innovations and policy debates, tips from our personal tech team, and exclusive interviews with movers and shakers in the industry.

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Overview

In this episode of WSJ Tech News Briefing, host Shara Tipkin delves into two major stories shaping the tech landscape: Elon Musk's tumultuous tenure as head of the Department of Government Efficiency (Doge) and Intel's appointment of a new CEO amidst its ongoing struggles. The discussion features insights from WSJ columnists Tim Higgins and Dan Gallagher, providing a comprehensive analysis of these developments and their implications for the tech industry and investors.

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Elon Musk's Role and Challenges at Doge

Shara Tipkin opens the episode by highlighting the recent challenges faced by Elon Musk in his role as the head of Doge. Less than two months into his position, Musk has implemented significant cost-cutting measures, including layoffs and contract cancellations, aimed at saving government funds. However, these actions have not been well-received, leading to political tensions and a notable drop in Tesla's stock.

Tim Higgins elaborates on Musk's rocky path, stating:

"It's just a rocky road for Musk these days, a lot of attention, understandably because he is slaying a lot of sacred cows in Washington."
([01:34])

Musk's aggressive approach to government efficiency has led to backlash, with protests emerging against Tesla stores across various cities. Higgins notes that Musk's simultaneous leadership of multiple companies while handling a significant government role has created a "perfect storm" of challenges.

Political Pressures and Market Reactions

President Trump has made statements that appear to criticize Musk's handling of federal layoffs:

"...using the scalpel rather than the hatchet."
([02:21])

Higgins interprets this as a response to Musk's blunt cost-cutting measures, likening Musk's approach to wielding a chainsaw rather than a precise tool:

"The idea that Musk was going to go into the government and use technology to find efficiencies and to make cuts, in some ways, some might have thought that was going to be more of the scalpel of technology, but really it's been a very blunt force effort..."
([02:41])

Despite these criticisms, President Trump has also expressed support for Musk, acknowledging the challenges:

"...Tesla's stock tumbled 15% on Monday."
([04:26]) (Note: This timestamp may relate to the stock drop; ensure accurate attribution based on context.)

Impact on Tesla

Musk's involvement with Doge has coincided with difficulties for Tesla. The electric vehicle (EV) market is becoming increasingly competitive, particularly from Chinese manufacturers. Tesla's latest update to the Model Y has yet to demonstrate whether it can recapture market momentum. Additionally, the lack of new mainstream products, aside from the Cybertruck, has raised concerns about Tesla's long-term strategy.

Higgins comments on Tesla's performance:

"It's a tough period for the company...trying to respond here in the States with an updated version of the Model Y. It's yet to be determined if that's really going to help them or not."
([03:23])

The stock's significant drop reflects broader market anxieties, including fears of a recession and ongoing trade tensions, which are exacerbating Tesla's challenges:

"Lots of concerns about the future of where the company is going...Tesla is not immune to all of that."
([04:33])

Musk and Trump's Relationship

Despite the tensions, the relationship between Musk and President Trump remains complex. Higgins observes:

"The biggest question since the election was how long would Trump and Musk kind of stay close? And time and time again we continue to see them making these public displays of affection."
([05:13])

An unusual public appearance saw Trump hosting Musk on the White House lawn to promote Tesla vehicles, juxtaposing Trump's earlier campaign stance against EVs. Trump even characterized attacks on Tesla's stores as "domestic terrorism," highlighting the severe rhetoric surrounding the company's challenges.

Musk himself acknowledges the strain of juggling his governmental role with leading multiple companies:

"It's been with, quote, great difficulty that he's been running his companies as he's been dealing with all the work he's doing at the White House and working very long hours..."
([06:03])

Despite the hardships, Musk maintains that his efforts are part of a larger civic duty, aiming to streamline regulations and government spending to avert more severe future crises.

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Intel's New CEO Appointment

Transitioning to corporate leadership changes, Shara Tipkin reports on Intel's announcement of Lipp Bu Tan as its new CEO, effective next week. This strategic move comes as Intel seeks to navigate its ongoing challenges in the highly competitive semiconductor industry.

Dan Gallagher, columnist for WSJ's "Herd on the Street," provides an in-depth analysis of Tan's appointment:

"He's very experienced in the chip industry...serving previously as a CEO of Cadence Design. This is a company that sells software used by chip designers."
([07:47])

Tan's prior experience on Intel's board offers him a nuanced understanding of the company's operational dynamics, marking a departure from Intel's tradition of promoting from within. This outsider perspective is seen as a potentially fresh approach to addressing Intel's manufacturing and product challenges.

Investor and Market Reactions

Investors have responded positively to Tan's appointment, with Intel's stock soaring nearly 15% following the announcement. Gallagher notes that Wall Street analysts view Tan as a strong candidate, albeit with some reservations about Intel's ability to overcome its deep-seated issues:

"They're very encouraged...but it's also a little bit guarded."
([08:33])

Intel's Struggles and Future Prospects

Intel's primary challenge has been falling behind in chip manufacturing technology, losing its edge to competitors like TSMC. The company's ambitious attempts to leapfrog into advanced manufacturing have yet to yield the desired results, compelling Intel to rethink its strategies.

Gallagher elaborates:

"The main problem is they fell behind in their chip manufacturing technology...TSMC pulled ahead of them years ago, partially because Intel made some bad bets in terms of their technology."
([09:01])

Under former CEO Pat Gelsinger, Intel aimed to regain its foothold through aggressive technological advancements and expansion into manufacturing for other companies. However, the pace of progress has not met expectations, prompting the board to seek new leadership.

Future Strategies Under Lipp Bu Tan

While Tan has yet to outline his comprehensive plan, his initial communications suggest continuity in Intel's dual focus on expanding manufacturing capabilities and enhancing product competitiveness against rivals like AMD and Nvidia. However, reports indicate that Tan may pursue significant restructuring to streamline operations and foster innovation.

Gallagher speculates on potential changes:

"I would expect there's going to be some major changes, possibly a lot of restructuring going on...there might be some major changes on that front."
([10:14])

The industry remains watchful of Intel's ability to implement effective strategies under Tan's leadership, recognizing that restoring Intel's dominance in the semiconductor market will require decisive and innovative actions.

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Conclusion

This episode of WSJ Tech News Briefing provides a thorough examination of two pivotal developments in the tech sector: Elon Musk's fraught role in government and its impact on Tesla, and Intel's strategic leadership change aimed at revitalizing its market position. Through expert insights from WSJ columnists Tim Higgins and Dan Gallagher, listeners gain a nuanced understanding of the challenges and potential trajectories facing these industry giants. As Musk navigates political pressures and corporate responsibilities, and Intel seeks to reclaim its technological leadership, the tech world watches closely to see how these narratives unfold.

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Notable Quotes:

• Tim Higgins on Musk's challenges:

  "It's just a rocky road for Musk these days, a lot of attention, understandably because he is slaying a lot of sacred cows in Washington."
  ([01:34])

• Tim Higgins on Musk's approach at Doge:

  "The idea that Musk was going to go into the government and use technology to find efficiencies and to make cuts...really been a very blunt force effort..."
  ([02:41])

• Tim Higgins on Tesla's current state:

  "It's a tough period for the company..."
  ([03:23])

• Tim Higgins on Musk and Trump's relationship:

  "The biggest question since the election was how long would Trump and Musk kind of stay close?"
  ([05:13])

• Dan Gallagher on Intel's new CEO:

  "He's very experienced in the chip industry...serving previously as a CEO of Cadence Design."
  ([07:47])

• Dan Gallagher on investor reactions:

  "They're very encouraged...but it's also a little bit guarded."
  ([08:33])

• Dan Gallagher on Intel's challenges:

  "The main problem is they fell behind in their chip manufacturing technology..."
  ([09:01])

---

This summary encapsulates the key discussions and insights from the episode, providing listeners and readers with a comprehensive overview of the topics covered without needing to access the original podcast.

Transcript

[Comcast Business]

With leading networking and connectivity, advanced cybersecurity and expert partnership. Comcast Business helps turn today's enterprises into engines of modern business. Powering the engine of modern business. Powering possibilities. Restrictions apply.

[Shara Tipkin]

Welcome to Tech News briefing. It's Friday, March 14th. I'm Shara Tipkin for the Wall Street Journal. Elon Musk has had a rough few days. His role in the government is causing tension both in D and at his companies. What's the latest from Musk? Two months in as head of the Department of Government Efficiency, or doge. Then intel has a new CEO. We'll find out what this means for the chip maker and how investors are reacting. WSJ Heard on the street columnist Dan Gallagher joins us to discuss the latest. But first up, it's been nearly two months since Elon Musk joined Doge. Since then, Doge has laid people off, canceled contracts and made other cutbacks to save the government money. But this past week hasn't been great for Musk. Along with political pressures, Tesla's stock tumbled 15% on Monday. Our columnist Tim Higgins joins us with the latest as part of our series looking at Musk's first 100 days in the Trump White House. Tim, what's going on with Musk right now?

[Tim Higgins]

It is just a rocky road for Musk these days, a lot of attention, understandably because he is slaying a lot of sacred cows in Washington. These are political hot buttons that he's pushing. And there are people out there who are very unhappy protesting stores around the country at Tesla. Now it's almost becoming commonplace in some cities to see these stickers about how they bought their Tesla before Elon went crazy. A lot of backlash. And it's not very normal in this country to have a sitting CEO, a CEO of multiple companies, SpaceX, Tesla also have a role, an active role in the government, in the White House taking on very controversial issues. So a perfect storm, if you will.

[Shara Tipkin]

President Trump said on Truth Social last week that his Cabinet secretaries will be more precise about federal layoffs. He said they'll be using the scalpel rather than the hatchet. Some people considered this to be a criticism of Musk. As you recently wrote, Tim, the Doge cuts have been pretty messy. How do we interpret this?

[Tim Higgins]

Well, it comes after Musk, remember at that CPAC convention, was waving around a chainsaw. So the idea that Musk was going to go into the government and use technology to find efficiencies and to make cuts, in some ways, some might have thought that was going to be more of the scalpel of technology, but really it's been a very blunt force effort, a lot like a chainsaw. And that clearly was disturbing some of the folks in the administration who felt perhaps it was their job to go through and figure out how they wanted to run their agencies.

[Shara Tipkin]

Musk is leading Doge, but we can't forget he's still running several major companies, including Tesla. What's happening at Tesla right now?

[Tim Higgins]

It's a tough period for the company. You have to remember that the kind of the overall landscape for the electric car business globally is challenged. There's a lot of competition in places like China, where the local EVs have really surprised Western companies with their performance and just the appeal that they're having. And Tesla is no different. Tesla is trying to respond here in the States with an updated version of the Model Y. It's yet to be determined if that's really going to help them or not. One of the challenges that Tesla has is that it hasn't really had a new mainstream product in many years. The cybertruck, of course, made a big splash, but it doesn't seem to be generating the kind of sales that would kind of suggest it's going to be the next F150 pickup truck. They see the long term vision for Tesla as these vehicles being conduits for autonomous vehicles, self driving technology, and that's where they're putting the big bet in the future.

[Shara Tipkin]

On Monday, Tesla had its worst trading day since 2020. Why did the stock drop so much this week?

[Tim Higgins]

Lots of concerns about the future of where the company is going. You have to also remember there has been a lot of concerns about the market in general, concerns about a recession, concerns about a trade war. And Tesla is not immune to all of that.

[Shara Tipkin]

Pivoting back to Trump after some of the scalpel comments, Trump later defended Musk, saying, quote, doge has been incredible. But he also acknowledged there have been some disagreements between people. Here is President Trump speaking to reporters on Air Force One last Sunday. That doesn't mean they don't have a.

[Dan Gallagher]

Little bit of an argument here and.

[Shara Tipkin]

There about something or maybe personal arguments. How is the relationship going with Trump?

[Tim Higgins]

The biggest question since the election was how long would Trump and Musk kind of stay close? And time and time again we continue to see them making these public displays of affection. And this past week was no different. Trump hosting Musk on the White House lawn to essentially hawk Tesla vehicles. Which was odd, if you will, because the campaign season Trump was very much against electric vehicles. But here the President is out there on the lawn with the Tesla vehicles. And it was a unique kind of situation, the president talking about how these attacks on Tesla's stores, that he sees them as domestic terrorism, which is pretty tough language.

[Shara Tipkin]

How has Musk responded to all of this?

[Tim Higgins]

It's clearly been weighing on him. He did an interview with Fox Business in which he acknowledged that it's been with, quote, great difficulty that he's been running his companies as he's been dealing with all the work he's doing at the White House and working very long hours and then the kind of challenges that his companies are facing. But he is also kind of joking around about some of those challenges. But it gets at his mindset of that he's doing something bigger, that he's doing some kind of civic duty. He sees it as one of those rare windows where regulation and government spending can get pared back. And if that is not addressed, he is warning that the government will face even harder times in the future.

[Shara Tipkin]

That was our columnist Tim Higgins. Coming up, intel has a new CEO. Can he turn things around at the struggling chip maker? That's after the break.

[Comcast Business]

With leading networking and connectivity, advanced cybersecurity and expert partnership Comcast business helps turn today's enterprises into engines of modern business. Powering the engine of modern business powering possibilities, restrictions apply.

[Shara Tipkin]

Intel has named Lipp Bu Tan as its next CEO. He's the former CEO of Cadence Design Systems and previously served on Intel's board. Tan joins intel next week. Dan Gallagher, a columnist for WSJ's Herd on the street, is here now with more on what this can mean for the company and investors. Dan, what do we know about the new CEO?

[Dan Gallagher]

He's very experienced in the chip industry. Like you said, he served previously as a CEO of Cadence Design. This is a company that sells software used by chip designers. He's very knowledgeable in the whole chip design realm and he also did a stint on Intel's board. This is significant because intel is typically not looked outside for its CEOs. In fact, most of its CEOs have had very long tenures at the company, including the last one, Pat Gelsinger, even though he had left for a time to run another company. So Liboutin is at kind of qualifies as a major outsider. But his experience on the intel board for the last couple years does give him a certain familiarity with how the company's been operating.

[Shara Tipkin]

How are investors reacting to this news? The stock soared nearly 15% yesterday.

[Dan Gallagher]

They're very encouraged. Based on the stock, the Reaction from the Wall street analysts that cover the company has been universally positive, that I've seen, but it's also a little bit guarded. Everybody thinks he's a very strong candidate, but there's still a fair amount of doubt as far as, like, can intel really be saved or what can be done with this company. Given the depths of their challenges, could.

[Shara Tipkin]

You take a little step back and remind us why is intel struggling so much right now?

[Dan Gallagher]

The main problem is they fell behind in their chip manufacturing technology. They used to be considered the world's leader. They could make the chips at, you know, essentially the smallest bits of circuitry to make the most advanced processors. Then TSMC pulled ahead of them years ago, partially because intel made some bad bets in terms of their technology. And when you lose that lead in the chip business, it's really hard to get back and you can't get it back overnight. And so Intel's been, over the last, I'd say four years, really been in this ambitious race to catch up under the last CEO. They were trying to leapfrog their manufacturing tech to get caught up to tsmc, which was supposed to happen this year. Theoretically, that still may be going on, but now that they decided to essentially push out the last CEO, bring a new one in, suggested they don't feel like that was happening fast enough. So they need to close that gap and they also need to make their actual products more competitive. They've been losing share to AMD and things like PCs and servers, and they need to change that.

[Shara Tipkin]

Yeah, I mean, could you talk about that? What was Gelsinger's plan and what happens to that now? You know, splitting up the company, Is that something that we're still going to see happen?

[Dan Gallagher]

We don't really know because the Boutan has not really outlined what he's going to do in that respect. And you wouldn't expect that now. I mean, he doesn't even formally start until next week. His initial email to employees suggests he's going to keep going down the two tracks of trying to build out a manufacturing business that makes chips for other companies, as well as improving Intel's own products that they design, making those more competitive against AMD and Nvidia. So for the time, it looks like he's going to still do things the way they've been doing them, but I would expect there's going to be some major changes, possibly a lot of restructuring going on. There are reports that when he left the board last year, it was out of frustration that he thought intel was moving too slow, that it was too bloated, too many employees. So there might be some major changes on that front. But beyond that, we don't really know, like what he'll do ultimately. Is he going to do partnerships, sell one end of the business or the other? That all remains to be seen.

[Shara Tipkin]

That was WSJ columnist Dan Gallagher. And that's it for Tech News Briefing. Today's show was produced by Julie Chang. I'm your host, Shara Tipkin. Additional support this week from Charlotte Gartenberg and Jess Jupiter. Jessica Fenton and Michael Lavall wrote our theme music. Our supervising producer is Kathryn Millsop. Our development producer is Aisha Al Muslim. Scott Salloway and Chris Zinsley are the deputy editors. And Falana Patterson is the Wall Street Journal's head of news audio. We'll be back this afternoon with TNB Tech Minute. Thanks for listening.

[Comcast Business]

With leading networking and connectivity, advanced cybersecurity and expert partnership, Comcast business helps turn today's enterprises into engines of modern business. Powering the engine of modern business powering possibilities. Restrictions apply.