Good morning.
“Our competition is out to eat our lunch. And if we don’t fight for it every single frickin’ day, we are at risk of losing it.”
That’s Intel CEO Pat Gelsinger speaking to Ellen McGirt and me for this week’s episode of our Leadership Next podcast. Gelsinger came to Intel after eight years as CEO of VMware. But his roots at Intel run deep. A Pennsylvania farm boy, he joined the Santa Clara chip company at the age of 18, worked there while earning his college and graduate degrees, and mentored under the legendary Andy Grove. His goal as CEO is to recreate a “Grove-ian” culture: “Disciplined decision making. Blunt, data-rich conversations. Tough, aggressive engineering.”
But with this twist: he’s also looking for a multi-billion handout from the government, to help build semiconductor manufacturing in the U.S. “I’m a free marketeer to the core,” he insists. But he notes the U.S. share of semiconductor manufacturing capacity has dropped from 37% in 1990, to 12% now, with Asia making up the difference. “The lack of clear industrial policy here has led to an outcome that is precarious for our security, for our infrastructure, and for our long-term competitiveness.”
For the last half century, the U.S. has had an aversion to industrial policy, and its occasional nods in that direction have led to notable mistakes—remember Solyndra? But funding U.S. manufacturing of semiconductors has become one of the only issues that can win bipartisan support in Congress. The reason? China—and its insistence on sovereignty over Taiwan, which is the dominant player in the chip market. As a result, Gelsinger is likely to get his handout. Reinvigorating Intel’s culture may prove the harder part of the task.
You can listen to the podcast on Apple and Spotify. And I’ll be asking Commerce Secretary Gina Raimondo about the wisdom of the $50 billion semiconductor subsidy program later today at the opening of the Fortune Global Forum. News from the forum in this space tomorrow.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Tax avoidance
ProPublica has published a blockbuster exposé on how the U.S.'s richest individuals—including Warren Buffett, Elon Musk and Jeff Bezos—have managed to pay extremely low proportions of tax. It's all based on an anonymously submitted trove of IRS data covering more than 15 years. From the piece: "No one among the 25 wealthiest avoided as much tax as Buffett, the grandfatherly centibillionaire. That’s perhaps surprising, given his public stance as an advocate of higher taxes for the rich." ProPublica
Alzheimer's drug
Biogen's shares closed up more than 38% yesterday after the FDA approved the company's aducanumab for the treatment of Alzheimer's. This was the agency's first approval of a new Alzheimer's drug in over 15 years, and the first ever for a drug that targets the underlying causes of the disease, rather than its symptoms. There is however controversy over the efficacy of the drug, which will be marketed as Aduhelm. Fortune
Ransom recovery
The U.S. has recovered most of the $4.4 million ransom that Colonial Pipeline paid its cyber-attackers last month, in the form of cryptocurrency. "Today we turned the tables on DarkSide," said Deputy Attorney General Lisa Monaco, referring to the Russia-linked gang that was implicated in the attack, which temporarily halted fuel supplies across the U.S. east coast. Fortune
Talent battle
Fortune has a package of stories out about the post-pandemic war for talent in the U.S.: S. Mitra Kalita on the scale of the problem; Geoff Colvin on three strategies for winning the war; Marco Quiroz-Gutierrez on companies reassessing their insistence on a college degree; Lance Lambert on finding where the best jobs are; and McKenna Moore on how to set boundaries at a new job.
AROUND THE WATER COOLER
Apple in China
Apple has introduced a new privacy feature—a "private relay" that is basically a virtual private network (VPN), relaying the user's web browsing through Apple's and third-party servers in order to shield it from Internet service providers. It's great news for Apple's users, unless you're in China, in which case tough luck, Apple won't be protecting you from surveillance. Reuters
A.I. debunking
It really says something about Microsoft that it lets one of its senior principal researchers, Kate Crawford, heavily criticize "A.I." despite the company pushing hard in the field. Crawford has a new book out, arguing that A.I. is neither artificial nor intelligent. "It is made from natural resources and it is people who are performing the tasks to make the systems appear autonomous," she says in this interview. Guardian
Criminal app
Law enforcement often complains about criminal use of encrypted-messaging apps such as WhatsApp, but here's an app that was specifically designed for crooks: ANoM, which was only available on special phones bought from underground sources. High-level criminals vouched for its integrity…but it turned out the FBI and Australia's Federal Police were listening in for three years. The result? Hundreds of arrests, foiled killings, and vast asset seizures. CNN
Online shopping
Incoming Stitch Fix CEO Elizabeth Spaulding writes for Fortune that the pandemic has changed what we wear and how we shop: "As the seismic events of 2020 took hold, thousands tried apparel shopping online for the first time—and we saw nearly five years of adoption in one year alone. We believe the shift online is permanent and nearly half of U.S. apparel spending will move online by 2025." Fortune
This edition of CEO Daily was edited by David Meyer.
