Who is the current ceo of intel

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VMware CEO Pat Gelsinger has always had a reputation as being a bit of a Boy Scout. So he decided to play against type a few years ago for his keynote address at the software company’s annual customer conference in Las Vegas.

“What can I do to take my commitment to the next level,” he asked the crowd. “I went down the street to Bad-Ass Tattoo.”

Rolling up his sleeve, Gelsinger revealed a huge tattoo spelling out the company’s name in bold black letters across his left forearm. He even had a photo of himself at the aforementioned local parlor getting the seemingly permanent sign of his loyalty to VMware administered by a blonde braided tattoo artist. “Sometimes what happens in Vegas, you take home,” he added.

The audience loved it, but his wife was not amused. Luckily for Gelsinger’s marriage, the tattoo was only temporary and the photo was staged.

And now, luckily for his career choices too. Intel announced on Jan. 13 that its current CEO, Bob Swan, was stepping aside next month and that Gelsinger would take over. In many ways, it’s a return of the prodigal son, as Gelsinger, 59, spent three decades at Intel before leaving in 2009 for EMC and eventually the top role at VMware.

Intel could use some help. The once-dominant chipmaker for PCs and servers is facing challenges from all directions. While manufacturing stumbles have hamstrung Intel’s own chip improvements, Advanced Micro Devices is grabbing market share with better performing processors. Nvidia is buying rival Arm to bolster its position in processor chips, and Apple has defected from Intel to chips of its own designs, perhaps enticing Microsoft to follow suit. Meanwhile, big cloud services at Amazon and Google are developing their own server chips to displace Intel as well.

A lot of Intel’s shortcomings over the next three years “are likely already set in stone, and there is not much Pat is going to be able to do to change that,” longtime chip industry analyst Stacy Rasgon at Bernstein Research noted after the announcement on Wednesday.

Gelsinger certainly seems up to the task. Growing up on a farm in an Amish part of rural Pennsylvania, he woke up before dawn to care for pigs and cows. His main morning task, he told Forbes years later, was to “go straight to a day of dusty labor and try not to get kicked by an animal.”

Neither of his parents had more than an eighth-grade education, he told the Computer History Museum. “They just pounded into us, from early ages, go to school, go to school,” he said.

In high school, he showed an aptitude for math and science and graduated early after winning a scholarship at a branch of the Lincoln Technical Institute. That was the first place he encountered computers, excelled at electronics, and drew the attention of a recruiter from Intel. A job interview in Silicon Valley came courtesy of the first plane ride of his life. Only 18 years old and without a four-year college degree, Gelsinger took a job at Intel as a quality-control technician in 1979.

Taking advantage of Intel’s generous tuition reimbursement program and flexible work hours policy, he then got a BA in electrical engineering at Santa Clara University in 1983 and a master’s degree from Stanford University in 1985, all while working full-time. Legendary computer science professor John Hennessy was Gelsinger’s master’s adviser at Stanford.

He also continued gaining responsibilities. While working on Intel’s 386 processor, he drew the attention of hard-driving Intel CEO Andy Grove, a “career defining moment,” Gelsinger said later. Grove mentored Gelsinger for decades afterward.

Gelsinger was put in charge of the design of Intel’s popular 486 chip line in his twenties and became the company’s first-ever chief technology officer in 2001, at age 40.

Gelsinger has a somewhat unusual background in Silicon Valley as a devout Christian. A strong religious upbringing has helped him navigate the difficulties of the corporate world, he says. A favorite biblical verse from the Book of Colossians commands, “Whatever you do, work at it with all your heart, as working for the Lord, not for human masters.” He cited the verse in a 2016 interview, adding: “I can get the snot kicked out of me at a board meeting or during a sales call, and I can rebound the next day, full of joy and purpose, to start anew.”

He also met his wife, Linda, at church services when he first moved to California.

Despite all his success and talents at Intel, Gelsinger was passed over for the top job in 2005, when Paul Otellini was selected. Gelsinger hopped to data storage giant EMC as chief operating officer in 2009, moving to the Boston area.

Still aiming to be a CEO, he asked to attend EMC board meetings and got plenty of advice from the company’s cofounder, Jack Egan. “We’re an East Coast company. You need to dress like you’re at an East Coast company,” Egan told him, Gelsinger later recalled. The command prompted a quick shopping trip to Nordstrom’s that night.

Egan also told Gelsinger he needed to better understand corporate finance. So Gelsinger spent a year getting tutored in the subject by a Columbia University professor.

The homework paid off when the top job at EMC’s VMware unit opened up in 2012.

At first, the fight was against cloud computing. Amazon advocated that companies give up running their own data centers and move to the cloud. Gelsinger tried to fight back with offerings to make data centers more efficient and more secure. Then VMware tried to create its own cloud service, but that flopped. Ultimately, opposing the cloud was a losing battle, and Gelsinger shifted strategy completely, partnering VMware with Amazon’s and Microsoft’s services and making software that assisted customers moving to the cloud.

“Simply put, customers are asking us to do more together,” Gelsinger told Fortune in August 2019, explaining the deal with Microsoft Azure. He had previously outlined his philosophy in another interview with Fortune in April 2019. “If you don’t get in front of these waves of transition, you’re driftwood,” Gelsinger said. “You’ve got to get on the right portion of the wave and have that energy pull you forward.”

The deep engineering background has helped Gelsinger identify trends like the cloud, which should help him steer the ship at Intel. A few years ago, he even coined an acronym for what he saw as the most important trends of the time, though it was an acronym only an engineer could love: SOMOCLOBAT. That stood for social, mobile, cloud, and big analytical data.

Intel has struggled in several of those areas, particularly mobile. Gelsinger will need more than a few more acronyms to succeed.

New York(CNN Business) Intel has named Pat Gelsinger as its new chief executive officer, replacing Bob Swan after a rocky two-year run.

The chipmaker recruited Gelsinger from software firm VMWare, calling him a "highly respected CEO and industry veteran" in a release. Gelsinger, who has been VMWare's CEO for about the past decade, will take the helm at Intel on February 15.

Intel (INTC) shares rose nearly 8% following the news, while VMWare (VMW) shares slipped almost 8%. CNBC first reported the news.

Swan was named Intel's permanent CEO in January 2019 following the departure of its previous CEO Brian Krzanich, who was forced to resign in June 2018 because of a "past consensual relationship with an Intel employee."

Under Swan, the company has struggled, losing market share to competitors in key business segments and dealing with manufacturing delays.

In its press release, Intel said the move "is unrelated to Intel's 2020 financial performance."

But "there have been a lot of questions about Bob Swan's leadership" after execution problems have raised questions over the past year about Intel's position as the market leader, said Kevin Krewell, principal analyst at Tirias Research.

He called Swan "a very capable CEO," but noted that "people were hoping [for] someone with more technical background" at the helm of Intel -- someone like Gelsinger.

And the leadership change comes after a letter to Intel from activist investor Dan Loeb of Third Point, calling on the company chairman to hire an investment adviser to explore "strategic alternatives" aimed at regaining market share from competitors. The suggestions in the letter included calls for the company to consider whether to continue making all of its chips in-house and divesting from "failed acquisitions."

In Wednesday's release, Intel said its board "concluded that now is the right time to make this leadership change to draw on Pat's technology and engineering expertise during this critical period of transformation at Intel," adding that the change will "ensure strong execution" of the company's new future.

Chip challenges

Among Intel's biggest challenges at the moment: The company has fallen behind competitors in producing the most advanced microprocessors.

Intel in recent years struggled to move from a 14-nanometer to a 10-nanometer chip, and it said in July that its 7-nanometer chips (which some of its rivals already have) would also be delayed. Meanwhile, rivals Taiwan Semiconductor Manufacturing Company (TSM) and Samsung (SSNLF) continue to move ahead with developing even smaller, more powerful processors.

As it grapples with the manufacturing difficulties, Intel also faces greater competition than it's "ever had in the past" in its core business areas, said Alan Priestley, vice president analyst for Gartner.

AMD (AMD) has stolen market share in the key PC and data center markets, and Nvidia (NVDA) has been investing heavily in the AI sector. Intel's PC business also recently took a blow when Apple announced it will use its own processors, rather than Intel's, in its new series of Macs.

Such issues have meant Intel's stock has also lagged behind competitors. The company's shares are down nearly 4% from a year ago, despite the bump they received from the news Wednesday. AMD's stock, by contrast, is up 87% over the past year, and TSMC's has grown nearly 99%.

"I hope that they'll come out with a real clear strategy about how they'll address the manufacturing issues, the competitive issues they face going forward," Gartner's Priestley said of Intel. He added that Gelsinger will need to address Intel's loss of technology leadership and decide how much of its technology to continue manufacturing in-house.

"(Gelsinger has) got to come out with a real clear strategy there," Priestly said, "something that gives the industry confidence that they're going to recover."

An Intel insider returns

Gelsinger brings to the top job a deep well of experience, both from within Intel and the broader business ecosystem in which the company operates.

Prior to his role at VMWare Gelsinger spent three decades at Intel, becoming became the company's first-ever chief technology officer and helped establish Intel's position as a market leader.

He then served as President and COO of Dell EMC, which sells IT infrastructure solutions such as data storage, cloud computing and analytics, before taking on the top job at VMWare.

At VMWare, Gelsinger oversaw massive growth. VMWare posted $10.8 billion in 2020 revenue, more than double the $4.6 billion it earned in 2012, the year Gelsinger became CEO. Both companies rely on innovations from chipmakers, insight that analysts say Gelsinger will bring as he returns to the chip giant.

"He understands the way Intel works and the technologies it has," Priestley said. "Because he's been at EMC and subsequently VMWare, I should hope he'll bring some interesting insights to the senior management team inside Intel, from an (equipment manufacturer) perspective and a major (software vendor) perspective ... he's seen it from the other side of the table."

Gelsinger also has a technical background — he architected the original 80486 processor at Intel and has associate's, bachelor's and master's degrees in electrical engineering — which has proven helpful to other Intel leaders in the past, as well as competitors like AMD CEO Lisa Su. Swan, by contrast, has a background in business management and finance; he was Intel's chief financial officer before becoming CEO.

"Intel has had a history of engineers becoming CEOs," Krewell said. "There's been exceptions of course, but in general, there's been a strong preference to have a technical CEO."