Neal's Deals (Vol. 91) - Silicon Slip-Ups: How Intel Lost Its Edge ??????
Hey everyone - Time for a little story in this edition of Neal’s Deals. As some of you may know, semiconductor giant Intel has appointed industry veteran Lip-Bu Tan as its new CEO. This decision comes just three months after Pat Gelsinger stepped down from both the CEO role and the company’s board.
To say Intel has had a turbulent few years would be an understatement.
When Gelsinger took over in February 2021, the company was already struggling, having fallen far behind its semiconductor rivals. Intel had missed out on the smartphone revolution and faced major setbacks in chip fabrication, critical errors that left it lagging behind the competition. Now, with a new CEO at the helm, Intel is attempting to reclaim its former glory.
A quick look at its stock performance paints a stark picture: Intel’s all-time high was more than 24 years ago, in August 2000. Since then, its stock has plummeted and has been unable to sustain a successful comeback. The company has made some tough decisions in response, including announcing this past August that it would lay off 15% of its workforce as part of a broader plan to cut $10 billion in costs. And in another symbolic blow, Intel lost its spot in the Dow Jones Industrial Average to Nvidia a few months ago, ending a 25-year run as one of the blue-chip index’s leading tech firms.
In this edition of Neal’s Deals, we’ll take a brief dive into Intel’s history, analyze its biggest missteps, and explore whether this new leadership shift could be the turnaround the company desperately needs.
The rise of Intel
Founded in 1968 by Gordon Moore and Robert Noyce, Intel derived its name from "integrated electronics" and quickly became a dominant force in the semiconductor industry. The company revolutionized computing in the 1980s with its CPU architecture, which became the industry standard for consumer and business applications. Intel's major breakthrough came in 1981 when IBM selected its processor for its personal computers, cementing Intel’s place in the market. Over the next two decades, Intel released groundbreaking processors like the 386 (1985), Pentium (1993), and Xeon (1998), continuously pushing performance boundaries. The company's "Intel Inside" marketing campaign in 1991 helped solidify brand recognition, making Intel synonymous with computing. A major win came in 2005 when Apple transitioned its Mac lineup to Intel’s x86 processors, marking the beginning of a 15-year partnership.
Where did things go wrong?
Very hard to keep this brief, but Intel’s downfall began with missed opportunities and strategic missteps in the early 2000s. A critical turning point came in 2007 when Apple sought Intel chips for the iPhone, but then-CEO Paul Otellini declined, underestimating the smartphone revolution. This decision allowed Arm-based processors to dominate mobile computing. By the 2010s, Intel faced increasing competition, with AMD’s Ryzen (2017) offering comparable or superior performance at lower prices. The company also struggled to keep up with chip manufacturing advancements, falling behind TSMC and Samsung in producing smaller, more efficient processors.
Beyond mobile, Intel also missed out on the AI revolution. As Nvidia surged ahead with GPUs optimized for machine learning, Intel remained focused on its traditional CPU business. Meanwhile, efforts to expand Intel’s foundry business, a key part of the CHIPS Act push for U.S. semiconductor independence, have been met with delays and uncertainty. With its stock down 66%+ from its 2000 peak, Intel now faces questions about its future, potential restructuring, or even a takeover by competitors like Qualcomm. Whether the company can reclaim its former dominance remains a big open question.
So who is this new CEO?
Lip-Bu Tan, 65, is a well-respected figure in the semiconductor industry, known for his leadership at Cadence Design Systems (2009–2021), where he helped turn the struggling company around by focusing on customer-driven innovation, doubling revenue, and expanding margins. He was honored in 2022 by the Semiconductor Industry Association for his contributions to the field. Prior to Cadence, he made his mark as a venture capitalist, founding Walden International in 1987, which focused on semiconductor startups in Asia. Tan’s background, however, comes with controversy. His extensive investments in Chinese semiconductor and AI companies have drawn scrutiny from Washington, especially as the U.S. seeks to limit China’s access to advanced chip technology. A 2023 congressional report raised concerns about Walden’s investments in blacklisted Chinese firms. Despite these geopolitical tensions, Tan’s leadership has sparked investor optimism, with Intel’s stock jumping over 10% amid speculation that he may split Intel’s product and manufacturing businesses to enhance competitiveness.
The key takeaway from all of this?
Well, Intel’s story is a prime example of poor innovation, missed chances, and the struggle to stay on top in a rapidly changing industry. No company, no matter how powerful, is safe from disruption. Intel dominated for decades, especially in our parents’ generation, but dropped the ball by failing to catch key tech waves first with mobile and then with AI. Now, with a new leader at the helm, the big question is whether he can turn things around or if it’s simply too late.
Time will tell, but for now, keep your foot on the gas and do not let up.
Let’s get to it:
AvatarOS, a Los Angeles startup that develops advanced 3D interactive human avatars for creators, studios, brands, and marketers, raised a $7 million seed round led by M13.
Why this is interesting: AvatarOS is reimagining the potential of digital avatars in an era where generative AI is transforming virtual identities. While many avatar solutions focus on aesthetics or simple automation, founder Isaac Bratzel, known for creating virtual influencers like Lil Miquela (2.4m followers), believes the industry lacks high-quality, personalized avatars with distinct traits. Bratzel launched AvatarOS to build avatars that don’t just look real but also move and behave uniquely. Unlike generic avatar solutions, AvatarOS prioritizes lifelike motion and nuanced interactions, setting it apart in a crowded market. The company is currently onboarding beta users and developing an API for seamless avatar integration, with plans to expand its toolset to offer greater customization. They also have massive commercial potential across industries, from enterprise customer service and virtual influencers to gaming, education, and e-commerce. As businesses seek more personalized virtual experiences, this one could set a precedent for a new era of AI-driven engagement.
Faireez, a New York startup that offers personalized housekeeping services to residents of multifamily buildings via a subscription model, raised a $7.5 million round led by Aristagora VC.
Why this is interesting: This is one I’d love to use… Faireez is shaking up residential housekeeping by offering a high-end, subscription-based cleaning service tailored to multifamily buildings. By integrating AI-driven technology, the company personalizes cleaning plans, ensures quality control through real-time image analysis, and even plans to introduce robotic assistants to enhance efficiency. Unlike traditional cleaning services, Faireez allows residents to book specific tasks rather than hours, bringing flexibility and transparency to an industry that has remained largely unchanged. With partnerships across major property management firms and plans for rapid expansion, the company is positioned to transform housekeeping into a premium, tech-enabled amenity for modern urban living. Although not explicitly stated, what I like about this one is that there are strongly aligned incentives for property managers with fewer maintenance issues, reduced reliance on random cleaners, and a single trusted provider ensuring consistency. This creates a more seamless, reliable experience for both building operators and residents, benefiting everyone.
Moonwatt, an Amsterdam startup that is developing advanced energy storage systems using sodium-ion battery technology, raised an $8.4 million seed round co-led by Daphni and LEA Partners.
Why this is interesting: Moonwatt is solving a major challenge in renewable energy: intermittency, or the inconsistent power output of solar due to changing sunlight conditions. Their battery storage system, built specifically for solar plants, helps store excess energy during the day for use when demand is higher. By using sodium-ion batteries instead of lithium-ion, Moonwatt offers a more scalable and cost-effective solution, avoiding the high costs and environmental impact of sourcing lithium, which is very scarce and, not to mention, difficult to extract. With Europe leading the charge in solar adoption and investing heavily in energy storage solutions, Moonwatt’s technology is very well-positioned to support the region’s transition to a more reliable and sustainable energy grid. It should be a fun one to follow.
Deals in the Works:?If you want to learn more - feel free to reach out
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Quote of the week:
"The winds of grace are always blowing; it is for us to raise our sails" - Ramakrishna
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Have a great weekend everyone!