Intel (INTC, Financial) announced the retirement of CEO Pat Gelsinger after nearly four years, creating a ripple of enthusiasm among investors. Interim co-CEOs David Zinsner, current CFO, and Michelle Johnston Holthaus, newly appointed CEO of Intel Products, will take over. This new segment includes Intel's Client Computing Group (CCG), Data Center and AI Group (DCAI), and Network and Edge Group (NEX), excluding the Foundry segment, which Intel plans to make an independent subsidiary.

Gelsinger became CEO in January 2021, succeeding Bob Swan, who was removed after two years due to poor growth and underperformance of Intel shares. With Gelsinger's exit, Intel is now seeking its third CEO in under six years.

• Intel's leadership changes highlight ongoing challenges. In 2021, delays in manufacturing next-gen chips were a concern. By 2024, the focus shifted to AI, with NVIDIA (NVDA, Financial) leading the demand for AI chips. Intel's competitor, Advanced Micro Devices (AMD, Financial), quickly adapted its chips to the AI trend, leaving Intel trailing behind.
• Intel is restructuring significantly. In Q2, the company announced a 15% headcount reduction and suspended its dividend as part of a $10 billion cost-cutting plan. Progress has been made on cost savings, despite initial setbacks.
• M&A activity is on the rise. Qualcomm's (QCOM, Financial) interest in a takeover has waned, but Lattice Semiconductor (LSCC, Financial) is reportedly considering a bid for Intel's Altera division, which makes telecom chips. Private equity firms have also shown interest in Altera. Selling assets could boost investor confidence amid Intel's financial challenges.

The incoming CEO faces a significant turnaround challenge as Intel separates its Foundry segment, navigates potential takeovers, manages M&A offers, and strives to stay competitive in the AI field. A visionary leader could unlock Intel's growth potential, but swift action in appointing a CEO is crucial as competitors continue their AI advancements.