Intel (INTC.US) is rumored to be approaching top headhunter Spencer to seek an “airborne” CEO from outside

The Zhitong Finance App learned that, according to media reports citing information revealed by people familiar with the matter, the established US chip giant Intel (INTC.US) is considering hiring an external candidate to replace the ousted Intel CEO Pat Gelsinger, and people familiar with the matter said that Intel has spent money to hire the world's top headhunting company Spencer Stuart (Spencer Stuart) to find a potential successor to the company's CEO. The media said that due to the absolute secrecy of the relevant discussions, these people familiar with the matter requested anonymity.

One of the people familiar with the matter said that Intel's board of directors also showed goodwill to the recently announced departure of Intel director Lip-Bu Tan and asked him if he would be interested in taking the top leadership position of the chip-making giant, which is in serious business trouble.

Since its inception, Intel has insisted on promoting senior technical personnel from within to serve as CEOs, so foreign airborne CEOs are bound to break this tradition. Although the ousted CEO Gail Singh was forcibly removed by Intel from virtual cloud service giant VMware in 2021, he had previously worked within Intel for decades, and his position grew higher and higher during this period.

Although Gal Singer's former CEO Robert Swan was Intel's first CEO hired from outside in the true sense of the word, many investors think that he is just a temporary CEO under equity measures and is not part of the list of CEOs in Intel's history. Robert Swan was later fired under pressure from radical rights investor Third Point.

The final list of candidates cannot be fully determined, but according to media reports, Matt Murphy, CEO of Marvell, one of the leaders in data center chips, is one of the CEO candidates Intel directors are urgently considering. Currently, Intel is at an overall disadvantage in the data center AI chip competition with AMD and Nvidia. If the Marvell CEO succeeds, it will undoubtedly be a huge boost to Intel's prospects, and is also very likely to receive collective recognition from investors in the stock market, thereby greatly boosting Intel's stock price, which has been sluggish in recent years.

In recent years, Marvell has successfully established long-term customized AI chip partnerships with technology giants such as Amazon by providing customized artificial intelligence chip products. Company CEO Matt Murphy said that Marvell will benefit from a surge in AI spending across the industry, and expects AI-related revenue to triple this year to more than US$1.5 billion and reach US$2.5 billion in the next fiscal year. Jefferies analysts estimate that Marvell's revenue from custom AI chips alone could reach 2.5 billion to $3 billion by 2025.

However, Murphy said during a Marvell earnings call on Tuesday that he is committed to his current company and focused on Marvell's development trends. Despite being criticized by Intel, Murphy said he is 100% focused on Marvell.

Intel revealed in a regulatory filing that Interim Executive Chairman Frank Yerry and a board-level committee are overseeing the search for a new CEO, but this process is still in its early stages.

Intel's board of directors is still likely to choose internal promotions to establish the next CEO. Internal candidates may include Chief Financial Officer David Sinsner or Intel Product Director MJ Holthos, all of whom are interim co-CEOs.

Intel abruptly ousted CEO Pat Gelsinger last weekend. People familiar with the matter said that the board of directors has lost confidence in his ability to carry out the full transformation of chipmakers to OEM. This established US chipmaker, which focuses on PC-side chips, has continued to lag far behind TSMC, the strongest competitor in the OEM business, for many years, and has lagged far behind Nvidia and AMD in competition in the PC and AI fields.

Intel revealed in a regulatory filing that Gal Singer will receive approximately $10 million in severance pay.

Intel's board members held a controversial meeting last week because Gail Singer was deemed to have failed to cope well with competitive pressure from Nvidia and AMD, and the board of directors seriously lacked confidence in his own plans to transition to an OEM business, believing that the costs were high and the profit prospects were vague.

William Stein, an analyst from Truist, pointed out in the report that although Kissinger's performance during his tenure was not as good as previous CEOs, he did drive some major changes, but the actions were not quick and far-reaching enough. Stan also pointed out that Intel's strong strength in the chip manufacturing industry has always been maintained, but this dominant position has also formed a “culture of rights,” causing Intel, which only focuses on its branded chip products, to fail to keep up with major changes in external chip manufacturing technology.