Intel gets the leader it needs

It’s a tough break for Swan, the former CFO who had a long and illustrious career in finance before ending up as the surprise pick for CEO at Intel almost exactly two years ago. All of Intel’s previous CEOs, starting with Robert Noyce in 1968, had a background in engineering and science or at least worked closely with engineers. Swan was an MBA whose career motto was “finance is not about counting the beans—it’s about helping the beans grow.” You can forgive Intel’s board, which was not successful in recruiting some more high-profile tech execs to take the job, for thinking that a leader with a completely different skill set might be the answer.

Turns out, it was not.

Swan took over a troubled giant, as Intel was struggling to perfect new technology to squeeze more transistors onto each processing chip. A push to moving from a scale of 14-nanometers to 10-nanometers, microscopic spacing that would allow for billions more transistors per chip, was already several years late when Swan took over. Cracking the whip, he reorganized the company and tried to ferret out the problems. Soon enough, the new CEO developed a promising narrative: Intel had tried to improve too much too quickly in the transition to 10-nanometers. The company wouldn’t make the mistake again, as it sought to pack even more transistors per chip at a scale of 7-nanometers next, Swan promised.

Then came the shocking announcement in July that Intel had fallen behind schedule on the 7-nanometer transition. As I exclaimed here at the time, what the hell just happened to Intel? But there were some warning signs, including the sudden departure of chip design star Jim Keller and Apple’s decision to abandon Intel chips and rely on its own silicon for future Macs.

Gelsinger marks a return to a more technically savvy leader at Intel. The hire must be immensely satisfying for Intel, as Gelsinger’s accession represents a return of the one-time boy wonder who grew up at the company but left to find a leadership post elsewhere and turned away overtures to run the business two years ago before Swan got the job.

Gelsinger started his career as a quality control technician at Intel, a job that helped pay for him to go to college. As we explained in Data Sheet a few years ago, a series of promotions marked him as the youngest ever this and first ever that. In 2001, he was named the first chief technology officer in Intel history. But when a relatively young CEO, Paul Otellini, blocked Gelsinger’s path to the top, he left to join EMC, where he was put in charge of fast-growing software developer VMware. He’s also been a tireless philanthropist who has focused on improving education for girls in Kenya.

“To come back ‘home’ to Intel in the role of CEO during what is such a critical time for innovation, as we see the digitization of everything accelerating, will be the greatest honor of my career,” Gelsinger wrote to Intel workers in an email this morning.

Investors are certainly pleased. Intel’s stock price has been stuck, failing to rise above the mid-50s for about three years, but it shot up to over $60 briefly on Wednesday morning. In addition to the CEO news, Intel also said its fourth quarter earnings would be better than expected and that the company has “made strong progress” in fixing the 7-nanometer delay.

Occasionally dour analyst Stacy Rasgon at Bernstein Research tried to temper the joy somewhat. Gelsinger is a good hire, Rasgon wrote this morning, but “the next 3 years or so (which will include guaranteed share losses to AMD, customers moving to alternative ecosystems across PC and datacenter, and further slippage of the technology roadmap) are likely already set in stone, and there is not much Pat is going to be able to do to change that.”

We shall see about that.

Aaron Pressman
@ampressman
aaron.pressman@fortune.com

NEWSWORTHY

Walk the walk. Six months after pledging $100 million to support racial equity and justice efforts, Apple is specifying how it will spend the money. Among the new projects, Apple will back a learning hub for Historically Black Colleges and Universities, set up an Apple Developer Academy to teach coding skills in Detroit, and give $10 million for backing for entrepreneurs of color. “We wanted to show people that this wasn’t just talk, Apple VP Lisa Jackson tells my colleague Michal Lev-Ram.

Finally. After most online platforms banned President Trump for inciting violence, Google's YouTube was an exception. But on Tuesday, after Trump uploaded new content, YouTube said the president had violated its policies and suspended his account for at least seven days. Meanwhile, domestic terrorists planning further attacks have improved their op-sec by shifting their online conversations to more encrypted apps like Telegram, NBC News reports.

Don't know where I'm a gonna go when the volcano blow. As favorite fictional banker Thomas Crown might say, quoting Leonard Cohen: "Sad to see another tired man lay down his hand and quit the holy game of poker." Visa it seems has laid down its hand and given up its $5 billion pursuit of fintech star Plaid in the face of the Justice Department's opposition. They have probably also issued a memo banning volcano drawings. What's next for Plaid? Something SPACtacular I assume.

Lending existence to something. On Wall Street, online lender Affirm priced its initial public offerings at $49 per share, way above its initially announced range of $33 to $38. That will give the company a valuation of at least $12 billion and may temper the massive stock price jump some other recent IPOs experienced when trading began. We'll see how well it worked when Affirm hits the tape with the symbol "AFRM" later today. Elsewhere on Wall Street, mobile chip giant Qualcomm is acquiring chip design startup Nuvia for $1.4 billion. The deal could help Qualcomm close the gap between its Snapdragon processors and Apple's increasingly outperforming M1 and A-series chips.

Until we feel that heat, we can never know. News about the SolarWinds cyberattack keeps getting worse. The same hackers also breached Mimecast, a leading security firm that scans for phishing emails. The hackers stole digital certificates that could allow them to read email stored on Microsoft Exchange servers for about 10% of the company's customers. In the mode of striking back, Irish teenager Greg Tarr won his country's "BT Young Scientist & Technologist of the Year" award for a program he wrote that uses A.I. to uncover deepfake videos.

FOOD FOR THOUGHT

The bitcoin rally, or the bitcoin bubble, depending on your point of view, has made some early investors in the cryptocurrency huge fortunes. Unfortunately, not all of them can access the treasure, maybe ever. Wait for it: they forgot the passwords on their bitcoin digital wallets. New York Times reporter Nathaniel Popper has the scoop.

In 2011, when he was living in Switzerland, (Stefan Thomas) was given the 7,002 Bitcoin by an early Bitcoin fanatic as a reward for making an animated video, “What is Bitcoin?,” which introduced many people to the technology.

That year, he lost the digital keys to the wallet holding the Bitcoin. Since then, as Bitcoin’s value has soared and fallen and he could not get his hands on the money, Mr. Thomas has soured on the idea that people should be their own bank and hold their own money.

“This whole idea of being your own bank — let me put it this way: Do you make your own shoes?” he said. “The reason we have banks is that we don’t want to deal with all those things that banks do.”

IN CASE YOU MISSED IT

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These U.S. cities led the world in reduced car traffic last year By David Z. Morris

The reckoning of the Capitol riots is up to us By Ellen Mcgirt and Aric Jenkins

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BEFORE YOU GO

There is beauty in the most unlikely places sometimes. Artist Walead Beshty makes boxes out of glass to fit exactly inside FedEx shipping boxes. Then he ships his fragile creations around the world to different galleries. The consequent damage–chips, cracks, and all–becomes part of the pieces. "The result is that the object is constantly changing," he says in an interview with Musee. "Every time the work is shipped it goes through a material transformation." If only we could just ship our country in a FedEx box to get the transformation we need right now. It's midweek. Power through.

(Hat tip to Jason Kottke for the link.)