Pat Gelsinger, who has served as Intel's CEO since 2021, has unexpectedly retired amid ongoing struggles within the company that predate his leadership.

In the wake of Gelsinger's departure, Intel's board has appointed David Zinsner and Michelle Johnston Holthaus as interim co-CEOs while they search for a permanent replacement.

Despite receiving an $8 billion grant from the CHIPS Act, Intel continues to face significant challenges in the competitive AI chip market, drawing criticism for its lack of innovation.

Intel's reliance on its own manufacturing capabilities has hindered its ability to attract external customers, especially as competitors like TSMC have gained dominance in the market.

The company has struggled with technological delays, particularly with its 10nm and 7nm processes, while rivals such as AMD and Apple have made rapid advancements.

Speculation surrounds the possibility of a complete split of Intel's foundry business, which could attract scrutiny from the U.S. Commerce Department due to the funding received under the CHIPS Act.

To be recognized as a 'national champion' in U.S. chipmaking, Intel must strengthen its manufacturing capabilities, a lengthy process that requires significant customer acquisition.

In September 2024, Intel secured an AI chip deal with Amazon through its Foundry subsidiary, indicating ongoing efforts to innovate despite the challenges it faces.

Analysts emphasize that regaining manufacturing competitiveness is crucial for Intel's future, particularly the successful execution of its 18A process.

Zinsner and Holthaus have reaffirmed their commitment to enhancing Intel's product offerings and improving customer satisfaction.

There are discussions about Intel potentially spinning off its manufacturing unit to focus solely on chip design, although this move would require substantial government support.

As the industry shifts toward AI and energy-efficient designs, Intel's core x86 architecture has become both a strength and a weakness, with competitors like Arm gaining ground.