Intel CEO Pat Gelsinger has stepped down, the company said Monday in a statement, as the US chipmaker struggles to keep up in the global chip race.
Gelsinger leaves the chipmaker with immediate effect, vacating his roles as CEO and as a member of the board.
The 63-year-old executive's departure follows a clash with Intel's board of directors regarding his plan to gain ground against rival chipmaker Nvidia, Bloomberg reported, citing people familiar with the matter.
Gelsinger was reportedly offered the choice to step aside or be fired, the outlet said.
"Today is, of course, bittersweet as this company has been my life for the bulk of my working career," he said in a statement. "It has been a challenging year for all of us as we have made tough but necessary decisions to position Intel for the current market dynamics."
Two senior Intel executives, David Zinsner and Michelle Johnston Holthaus, will lead the company during the search for a new CEO.
Intel, once a giant of Silicon Valley, has seen its share price drop almost 50% this year as it has faced multiple challenges.
Gelsinger's plans to revitalize the company included ambitions to build more factories in the US and Europe to scale its production capacity, as well as designing its own line of AI chips, named Gaudi, to take on the industry heavyweight Nvidia.
Many of these efforts have struggled, however. Last month, Gelsinger said the company was set to miss its target of $500 million in 2024 sales for Gaudi 3, its latest series of AI chips, due to software-related issues.
Gelsinger rolled out a sweeping set of initiatives earlier this year to turn the company around. In August, Intel laid off 15,000 employees, said it would suspend its dividend starting in the fourth quarter, and cut its capital spending.
Intel's stock price rose more than 3% when markets opened on Monday.
Frank Yeary, Intel's chair, thanked Gelsinger and said the company needed to restore investor confidence.
"While we have made significant progress in regaining manufacturing competitiveness and building the capabilities to be a world-class foundry, we know that we have much more work to do at the company and are committed to restoring investor confidence," Yeary said.
Intel received a boost last month as it was awarded $7.9 billion in federal grants through the US CHIPS Act.
Gelsinger was brought on in 2021 to lead the Santa Clara, California-headquartered company, with a remit to turn it into a powerhouse of the chip industry and close the gap with its Taiwanese rival TSMC.
He first joined Intel in 1979 and rose to become its chief technology officer in 2001. He then left the company in 2009 to join EMC, a subsidiary of Dell. In 2012, he became the CEO of the cloud-computing firm VMware before returning to Intel as its CEO in 2021.
