Technology

Intel separates from venture capital division to cut costs and review China investments

Intel is spinning off its venture capital division to reduce costs and address regulatory pressure.

Eulerpool News Jan 16, 2025, 2:52 PM

The struggling US chip manufacturer Intel will spin off its venture capital subsidiary, Intel Capital.

Intel Capital, one of the most prominent investors in Silicon Valley since 1990, has invested over 20 billion USD in around 1,800 companies so far. In the future, the fund is to operate as an independent entity under a new name and be able to raise capital from external investors for the first time. Intel, however, remains the main investor.

David Zinsner, one of the two interim CEOs, described the spin-off as a "win-win scenario" that provides the fund with additional capital while enabling a long-term strategic partnership with Intel.

This decision comes after a difficult year in 2024, during which Intel shares plummeted by about 60 percent. The company lost ground to competitors like AMD and Nvidia in both chip manufacturing and design. In December, the then-CEO Pat Gelsinger was ousted due to internal tensions over his costly strategy.

Intel Capital is also under pressure due to its investments in Chinese technology companies. While U.S. authorities restrict capital flow to Chinese firms, Intel Capital holds investments in 43 Chinese start-ups, including the chip manufacturer Horizon Robotics.

As part of a comprehensive savings program, which also includes delaying factory projects in Germany and Poland as well as cutting 15,000 jobs, Intel continues to search for a permanent CEO to stabilize the company.

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