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.

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.

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.

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.

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.

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.