More than two months ago, Intel (INTC -2.20%) made a surprising move. It pushed CEO Pat Gelsinger out the door. The board of directors did so without lining up a replacement and named two interim co-CEOs in his place, CFO David Zinsner and CEO of Intel Products Michelle Johnston (MJ) Holthaus.

In some ways, the move made sense. The stock had floundered under Gelsinger as Intel struggled to overcome past missteps, gain ground in AI, and turn its foundry business profitable. However, in other ways, the timing was odd. Gelsinger was in the middle of a massive restructuring of Intel's foundry business, opening it up to outside customers and giving investors a forecast that called for it to generate massive profits by the end of the decade.

According to reports, the chip titan is struggling to find a permanent CEO to replace Gelsinger, and that shouldn't come as a surprise. In a number of ways, the next candidate looks set up for failure. Now, Intel's leadership hole is getting even deeper as its chief of the data center and AI segment is jumping ship for Nokia.

Image source: Getty Images.

Hello Nokia, goodbye Intel

Nokia said on Monday that Justin Hotard, the leader of Intel's data center and AI segment, will replace outgoing CEO Pekka Lundmark on April 1.

The move comes a little more than a year after Intel recruited Hotard from Hewlett Packard Enterprise to run the key growth division. Intel has not released a statement on Hotard's departure, though he said in Nokia's press release: "I am honored by the opportunity to lead Nokia, a global leader in connectivity with a unique heritage in technology."

Is Hotard's departure significant?

Intel has already named an interim replacement for Hotard, tapping Karin Eibschitz Segal to head the data center and AI unit. Segal has previously run Intel's operations in Israel.

Executives change jobs for all types of reasons, and Hotard may have simply jumped at the opportunity to be CEO of a well-known tech company, but the departure throws the company's growth strategy into further disarray.

It's also possible that Hotard could have been frustrated with the broader turnaround at Intel. The company announced massive layoffs in August. That month, Lip-Bu Tan, a veteran of the semiconductor industry, left the board after expressing frustration with the company's bloated workforce and risk-averse culture.

Following Gelsinger's exit, Hotard could have also felt that the company was headed in the wrong direction.

Intel's latest quarter showed that even its data center and AI segment -- its biggest segment after client computing -- continues to struggle, even as peers like Nvidia, AMD, and Micron have posted scorching growth in the data center in their recent quarters. Intel, meanwhile, saw data center and AI revenue decline 3% to $3.4 billion in the fourth quarter as overall revenue was down 7% to $14.3 billion.

Notably, investors didn't seem bothered by the news, as Intel stock rose on Monday. But that was likely due to news that its subsidiary Mobileye was teaming up with Lyft to launch robotaxis in 2026.

About that CEO opening

On its recent earnings call, Intel said that the board continues to be "intensely focused" on finding a permanent CEO and that the search was progressing.

However, media reports have indicated that the company isn't close to naming a new CEO. It's a big decision for the struggling chipmaker, and it put itself in a hole by ousting Gelsinger first rather than working on finding a replacement for him behind the scenes. With Hotard's departure, it seems like Intel is taking another step backward at a time when the company desperately needs to fill its leadership ranks with capable talent.

That the company's revenue is declining by 7% at a time when the entire industry is seeing tailwinds from the AI boom shows how desperate things have become for Intel.

The longer the company goes without a permanent CEO, the less likely it is to succeed in its turnaround. Losing its AI chief only adds insult to injury.