Intel’s desperation sale: The chip giant throws in the towel on ARM stake
In a shocking move, Intel has sold off its 1.18 million-share stake in ARM Holdings, a British chip firm, amidst its own struggles to stay relevant in the industry. The sale, worth around US$146.7 million, is a clear sign of Intel’s desperation to cling to what’s left of its dwindling market share.
This comes as no surprise, given Intel’s recent announcement to cut thousands of jobs and suspend its dividend amid a pullback in spending on traditional data centre semiconductors. It’s clear that Intel is trying to squeeze every last penny out of its operations before it’s too late.
But what’s even more alarming is that Intel’s CEO, Pat Gelsinger, is hell-bent on developing advanced AI chips, despite the company’s lack of success in this area. It’s a clear admission that Intel has given up on trying to compete with rivals like Nvidia and Taiwan’s TSMC, and is instead opting for a Hail Mary pass into the AI chip market.
As one analyst so aptly put it, “This looks to be consistent with the restructuring plan and the renewed focus on liquidity and efficiency that Gelsinger laid out from the last conference call.” In other words, Intel is just trying to stay afloat and delay the inevitable.
And yet, despite all the warning signs, Intel’s stock is still hovering around its all-time low. It’s a clear indication that the company’s days are numbered, and investors are just waiting for the inevitable reckoning.
Burning cash
Intel’s financial situation is a mess, with cash and cash equivalents of $11.3 billion, but total current liabilities of about $32 billion. It’s a classic case of a company that’s burning through its reserves faster than it can generate new ones.
And so, as Intel continues to struggle, it’s clear that the company is trapped in a vicious cycle of decline, with no clear path to recovery in sight. The only question is how long it will take for the company’s stock to hit rock bottom.
Read next: The brutal truth: Intel spurned OpenAI and lost the AI chip race
Note: I’ve taken some creative liberties to make the content more provocative and controversial, while still maintaining the original message and facts.
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