It might not be easy to find someone to take this hot spot. Before Gelsinger was named to replace CEO Bob Swan, there was speculation that a number of prominent executives were possible candidates. Many on Wall Street suggested turning to Lisa Su of Advanced Micro Devices Inc. for the job.

Intel board member Stacy Smith, a former CFO of the company, was also a previous candidate for the CEO position. He is currently the CEO of Kioxia Corp.

There is no list of potential candidates at Intel, Hans Mosesmann, an analyst at Rosenblatt Securities, said in a note. “Bringing a new outside CEO to Intel is a multi-year job that presents significant challenges in an innovation cycle that is more intense than ever,” he said.

Gelsinger said last month he has “a lot of energy and passion,” still has the board’s support and is making progress. He expressed his determination to keep the company together amid reports that it was the subject of takeover bids.

At last week’s meeting, he faced concerns centered on the lack of products capable of succeeding in the market – something the board said was critical in the push to turn Intel into a bespoke chipmaker to do was neglected. He was asked to stay with his successor but showed little interest in doing so, the people said. That was the reason for the decision to end his term of office at the weekend, it was said.

“Today is, of course, bittersweet, as this company has shaped my life for most of my professional career,” Gelsinger said in the statement. “It has been a challenging year for all of us as we have made difficult but necessary decisions to position Intel for the current market dynamics.”

One of the biggest challenges for Intel: the disruption of the industry through artificial intelligence. Nvidia, which has made its graphics chips a key component of data centers, dominates this space and has reaped tens of billions of dollars that would once have gone to Intel. The former niche competitor, which fought in the shadow of Intel, has now become the most valuable listed company in the world. And Intel’s attempts to penetrate this market with new products have not yet been successful.

“We know we still have work to do at the company and are committed to restoring investor confidence,” Yeary said in Intel’s statement. “As the board, we know first and foremost that we have to put our product group at the center of our actions. This is what our customers demand from us and we do justice to them.”

Gelsinger’s departure could lead to more dramatic strategic changes.

“This move opens the door to a new strategy that we have been advocating for some time,” said Chris Caso of Wolfe Research. “While Gelsinger has been largely successful in advancing Intel’s process roadmap, we do not believe Intel has the scale to drive leading-edge manufacturing given the absence of AI alone.”

The turmoil at Intel also represents a setback to the Biden administration’s ambitions to rebuild the domestic semiconductor industry. Intel’s outgoing CEO was the biggest supporter of the Chips Act and promised to build massive new factories in the US.

In the end, the administration signed a final agreement to give Intel nearly $7.9 billion in federal grants, the largest direct subsidy from any program. The deal was smaller than a previous proposal but meant Intel could begin receiving funds once the company hits negotiated benchmarks for projects in four U.S. states.

President-elect Donald Trump has criticized the Chips and Science Act of 2022, which provides $39 billion in grants, $75 billion in loans and loan guarantees, and 25% tax credits to revive American chip manufacturing. He called the program “so bad,” and Republican colleagues threatened to revise or even repeal the legislation.

Intel’s challenges were highlighted during a disastrous earnings report on August 1, when the company issued a surprise loss and dismal revenue guidance. Intel also suspended its dividend, which it had paid out since 1992. In order to bring costs under control, Intel announced that it would cut more than 15% of its current workforce of around 110,000.

Holthaus, the interim co-chief executive, will also take on a new role as CEO of the company’s product group, where she will oversee client computing, data center, and AI and network operations. Holthaus began her career at Intel nearly three decades ago and previously served as general manager of client computing, which includes PCs.

Zinsner joined Intel in 2022 from Micron Technology Inc., the largest U.S. memory chip maker. In the past he has held various management positions, mainly in finance. His experience in the highly competitive memory market was seen as an asset in leading Intel through an unprecedented period in its history.

For much of the last 30 years, Intel has been flush with cash and able to outperform competitors on new technologies and products – the cornerstone of its success. The company now has more than $50 billion in debt and relies on securing outside investment to implement its plans.

– With support from Molly Schütz and Robin Ajello.

(Updates response in sixth paragraph.)

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