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Intel CEO Pat Gelsinger delivers a speech at the COMPUTEX forum in Taipei, Taiwan, on June 4, 2024.
Intel is ready to move forward — without its CEO
Now, time has run out for the man in charge. Pat Gelsinger, CEO of Intel, resigned after being forced out of the company on Dec. 2. Gelsinger spent nearly four years at the helm of the company, and he oversaw a 30% revenue decline between 2021 and 2023, a trend capped off by cutting 15,000 jobs. Executives David Zinsner and Michelle Johnston Holthaus will helm the company while the board of directors searches for a new CEO.
Intel is an integrated chipmaker, meaning it designs and manufactures its own chips. That’s a different model than Nvidia, a chip designer that sends its units to a contract manufacturer such as Taiwan Semiconductor Manufacturing Company to be made. But over the years it has lost ground on both the design and manufacturing fronts, and investors have grown impatient. The company’s stock has fallen nearly 50% since the beginning of 2024, even as the Biden administration has agreed to give Intel $7.86 billion to build new facilities in Arizona, New Mexico, Ohio, and Oregon.
Whoever assumes Intel’s top job will oversee a legend of American technology that has failed to meet the AI moment. That person must improve the technology and the manufacturing process to have a chance at positioning Intel at the forefront of AI. No small task — probably one of the biggest jobs in American industry.
Two hands touching each other in front of a pink background
Hard Numbers: Automate this, Everything’s expensive, Chips delayed, Intel cuts costs, Groq on the rise
106 billion: Capital expenditures from big tech firms are soaring this year, up to $106 billion, according to the self-reported estimates from Microsoft, Alphabet, Amazon, and Meta’s latest quarterly earnings reports. One of the biggest culprits? AI. These companies are acquiring expensive chips, and building out data centers to support their AI and cloud investments. And it may only be the start of a larger trend: Analysts say these figures could keep soaring for the next five years.
3: Nvidia’s latest chips will be delayed up to three months due to a critical design flaw. The chips, part of the company’s Blackwell series, are in high demand by AI companies such as Meta, Microsoft, and OpenAI, which have reportedly ordered tens of billions of dollars worth of the chips.
15,000: Intel announced late last week that it’s laying off 15,000 employees and halting non-essential work. The 15%-staff reduction is part of a $10 billion cost savings plan, the company said. It’s also cutting R&D and marketing budgets for the next two years. While Intel has benefitted from the Biden administration’s CHIPS Act stimulus, it’s not yet a major player in AI-grade chips, trailing Nvidia and AMD, so its business isn’t reaping the benefits of the AI boom — at least not yet.
$2.8 billion: Groq, the AI chip startup, raised $640 million in a new funding round as it seeks to challenge Nvidia’s dominance in AI-grade chips. The new investment, led by BlackRock, valued Groq at around $2.8 billion at the time of the investment. Meta’s Yann LeCun is also joining the company as a technical adviser.
Courtesy of Midjourney
Chinese national charged with stealing Google’s trade secrets
Image courtesy of Midjourney
Linwei Ding, a Chinese national residing in California, was arrested and indicted last Wednesday for allegedly stealing artificial intelligence-related trade secrets from Google and transferring them to his Chinese companies. Ding, who worked for Google, allegedly took more than 500 confidential files from his employer and used them in his work with two companies in China — one he founded, the other that recruited him and told investors he was the chief technology officer.
Neither Ding nor his lawyer have commented publicly on the case.
Bill Hannas, the lead at Georgetown University’s Center for Security and Emerging Technology and a former expert at the CIA, said it’s both a case of an individual allegedly enriching himself by stealing valuable trade secrets and a threat to US national security.
“Known cases of outright theft, where China is the beneficiary, number in the hundreds,” Hannas said. But there have been tens of thousands of cases overall in which US technology ended up in China through unknown or obscured means, he added.
Eurasia Group’s Director of Geo-technology Xiaomeng Lu says it’s still unclear if there’s any direct involvement from the Chinese government in Ding’s case.
“Maybe the FBI has more information about the case that they haven’t revealed,” Lu said, “but what I have seen in media reports doesn’t explicitly suggest the stolen information has serious national security implications – chip and software design information reads more like trade secrets than national security secrets.”
The United States tries to restrict China’s access to valuable technology that would aid its efforts to develop sophisticated AI models and computing capabilities. Washington strengthened export controls over semiconductor technology earlier this year to cut off China from the kinds of high-powered chips necessary to run AI models.
“Export controls encourage China to find other ways to get what they need,” Hannas said. “Chips are an area where China is said to lag by comparison, but the other big deficit, acknowledged by top Chinese scientists themselves, is AI algorithms.” It’s more difficult to clamp down on scientific progress than specific materials, and this kind of corporate espionage is one way of gaining parity with the US.
Ultimately, Washington is concerned that China will one day outpace the American military with AI-powered autonomous weaponry. “The theft of innovative technology and trade secrets from American companies can cost jobs and have devastating economic and national security consequences,” FBI director Christopher Wraywrote in a press release.
The Justice and Commerce departments’ Disruptive Technology Strike Force, established last year, has focused on using export controls to cut off foreign adversaries including Iran and Russia, in addition to China. Deputy Attorney General Lisa Monaco wrote that, as part of these efforts, the Justice Department will “relentlessly pursue and hold accountable those who would siphon disruptive technologies – especially AI – for unlawful export.”
A corporate espionage case targeting Google may be a ways away from delivering on that concern, but the government’s aggressive response signals a willingness to closely monitor any AI technology leaving the country — especially through illicit means.
If convicted, Ding will face up to 10 years in prison for each count.