(Bloomberg) — Once a powerhouse in the chipmaking world, Intel Corp. is now navigating a challenging path to regain its footing both financially and within the industry. As part of its strategic overhaul, the company intends to transform its venture capital division into a separate fund with a fresh identity.
The announcement on Tuesday confirmed Intel’s ongoing role as a significant investor in this new venture. This segment, presently called Intel Capital, boasts a portfolio exceeding $5 billion in assets.
Intel Capital has a storied legacy as one of Silicon Valley’s stalwarts in corporate investment, having injected over $20 billion into various enterprises over the past three decades. It traditionally focused on sectors benefiting the company’s core markets — personal computers and servers. Among its noted investments are prominent names like ASML Holding NV, Red Hat Inc., and VMware Inc.
The latest development aims to provide the venture arm with more autonomy, enhancing its capability to attract external financing.
According to a statement from Intel, operating out of Santa Clara, California, the standalone phase will kick off in the latter half of 2025, at which point Intel Capital will adopt a new brand name. During the transition, the current Intel Capital team will shift to the new entity, ensuring business continuity.
Intel is navigating turbulent waters as it grapples with dwindling market share and a dynamically shifting chip sector now dominated by Nvidia Corp. These challenges have compelled the company to implement cost-cutting measures, including layoffs, to maintain financial stability. The crisis also played a part in the departure of CEO Pat Gelsinger late last year, and the search for his successor is underway.
In parallel, Intel is actively pursuing other initiatives to streamline its operations and unlock capital. Sources indicate that efforts are in motion to find investors for the Altera unit, acquired back in 2015 for approximately $17 billion. This unit specializes in programmable chips.
Moreover, Intel’s investment in the autonomous driving technology firm Mobileye Global Inc. resulted in a public offering in 2022. Although Intel retains a substantial share in Mobileye, the unit is perceived as a potential fiscal reservoir for the company.
(Update includes additional strategies for capital generation in the last paragraph.)
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