Lip-Bu Tan’s high-stakes gamble: Can he revive Intel and take on Nvidia and AMD?

For decades, Intel stood as the undisputed leader of the semiconductor industry, powering everything from personal computers to the world’s most advanced data centres. Its dominance was built on relentless engineering excellence, process technology leadership, and a near-monopoly in the x86 computing era. But in the fast-moving semiconductor world—where innovation cycles are brutal, competition is relentless, and a single misstep can alter a company’s fate—Intel lost its edge.

Today, the company is a shadow of its former self, outmanoeuvred by Nvidia in AI, outperformed by AMD in high-performance computing, and out-innovated by Apple, which now designs its own industry-leading silicon. Intel’s manufacturing, once its greatest strength, has become its Achilles' heel, with TSMC and Samsung setting the pace in advanced nodes. Even Wall Street has lost faith—Intel’s removal from the Dow Jones Industrial Average in 2024 was more than a symbolic blow.

Pat Gelsinger’s return in 2021 was supposed to change everything. His vision was to restore Intel’s leadership and reclaim dominance in computing with the ‘Five Nodes in Four Years’ plan. Instead, Intel’s turnaround stalled. Process delays continued, foundry customers were scarce, and while the company made some progress, it was far from enough. Gelsinger was out in late 2024, and now the task of saving Intel falls to Lip-Bu Tan, a veteran of the semiconductor industry, former CEO of Cadence Design Systems, and a deeply connected figure in the venture capital world.

The question is simple but brutal: Is it too late?

Industry Optimism: A leader who knows the ecosystem

Despite Intel’s struggles, Lip-Bu Tan’s appointment has been widely welcomed by the semiconductor industry, sparking cautious optimism about the company’s revival. Unlike his predecessors, Tan is deeply embedded in the global chip ecosystem—his tenure as CEO of Cadence Design Systems (from 2009 to 2021) saw him work closely with semiconductor giants, foundries, and chip designers alike. He led the reinvention of the company, drove a cultural transformation centred on customer-centric innovation, and, most importantly, more than doubled the revenue, expanded operating margins, and delivered a stock price appreciation of more than 3,200%.

As a former member of Intel’s board, his extensive venture capital background means he has nurtured and invested in some of the most promising semiconductor start-ups, giving him a unique vantage point on where the industry is headed.

Ashok Chandak, President of the India Electronics and Semiconductor Association (IESA), told Fortune India, “Intel’s appointment of Lip-Bu Tan marks a strategic shift towards strengthening engineering excellence and customer-centric innovation. A highly respected leader in the semiconductor industry, Tan has previously participated in the IESA Vision Summit during his tenure as CEO of Cadence Design Systems. As a former Intel board member, he brings deep industry expertise, with a focus on revitalising Intel’s market position through an engineering-driven approach, product innovation, and enhanced customer engagement. His leadership is also expected to play a crucial role in reshaping Intel’s process technology roadmap and manufacturing capabilities.”

Intel needs results—And it needs them fast

Industry insiders believe Tan’s deep connections and customer-first approach could help Intel regain trust, secure key partnerships, and steer its foundry ambitions in the right direction. A similar sentiment was reflected among investors, as Intel shares jumped nearly 15% following the appointment of the new CEO. But optimism alone won’t be enough—Intel needs results, and it needs them fast.

Chris Miller, author of Chip War, told Fortune India, “I think Lip-Bu Tan is the best possible choice for Intel's CEO. He has deep credibility with the chip industry and with financial markets, both of which have raised tough questions about Intel's future. Still, he has a complex task ahead of him in trying to win customers for Intel's foundry manufacturing business while simultaneously reversing the company's market share losses in chips for data centres and PCs.”

Tan understands the stakes. His message to the team has been upfront and clear: “We cannot take anything for granted, and we will do regular deep dives to assess our progress. In areas where we have momentum, we need to double down and extend our advantage. In areas where we are behind the competition, we need to take calculated risks to disrupt and leapfrog. And in areas where our progress has been slower than expected, we need to find new ways to pick up the pace.”

AI and Data centres: The battle that matters most

If Intel is to stage a comeback, AI and data centre dominance must be the priority.

Right now, Nvidia is the undisputed leader, but the AI boom is still in its early days. Companies like OpenAI, Meta, and Google are searching for alternatives to Nvidia’s expensive, power-hungry GPUs. This is where Intel has a chance—if it can move fast enough.

Intel’s Gaudi AI accelerators have shown promise, offering a cost-effective alternative to Nvidia’s H100s. “Intel’s biggest problem is that they have not been able to execute their strategies well. Nvidia’s CUDA ecosystem is years ahead in AI, with more than 80% market share in the AI chips space. Meanwhile, AMD has quickly taken around 25% share in this space, and Intel’s share has declined to approximately 75%. Tan will need to make some big decisions, whether that means forming new partnerships, making strategic acquisitions, or aggressively pushing Intel’s AI accelerator lineup,” explains Devroop Dhar, Co-founder and MD, Primus Partners.

Intel also needs more than just good hardware—it needs a software revolution. Most AI workloads are currently built around Nvidia’s CUDA ecosystem. Tan’s success at Cadence was built on deep customer engagement and long-term partnerships; applying that same approach to AI could give Intel a fighting chance.

The foundry gamble

Gelsinger’s grand strategy was Intel’s pivot to becoming a foundry—manufacturing chips for other companies, much like TSMC. The logic was sound: Intel has fabs, and if it can’t beat TSMC on tech, it could at least compete for customers. The U.S. government even backed the move, as part of its effort to reduce reliance on Asian chip manufacturing.

But the foundry business is cutthroat. TSMC and Samsung have decades of expertise, supply chain advantages, and—crucially—the trust of customers. Intel’s foundry (IFS) has yet to prove it can deliver chips on time, at competitive prices, and at the scale that global tech giants require. So far, Intel has secured a few key clients (notably the U.S. Department of Defence), but winning over major commercial players remains a challenge.

Brady Wang, Associate Director, Counterpoint Research told Fortune India, “Improving semiconductor manufacturing takes time. TSMC, for example, spent decades and billions of dollars to grow from a follower to a leader. The chipmaking business requires massive investment, long-term research, and skilled talent.” He adds, “advancing chip technology is expensive—TSMC’s capital spending in 2024 exceeded $30 billion—and comes with high risks and long payback periods. The semiconductor industry also follows economic cycles, meaning heavy investments can turn into financial burdens during downturns.”

The idea to make Intel self-sufficient in the complete life cycle of chip manufacturing was a very well thought-off, however, the Intel Foundry unit posted significant losses which has led to the discussion of whether Intel should off-load the foundry business or go all in.

“Intel’s success and turn around are predicated on regaining manufacturing and operational excellence per the BIC metrics of the industry – which can only be achieved when Intel thinks, acts and reacts like a foundry, thus necessitating a foundry acquisition,” says Danish Faruqui, CEO of Fab Economics – Fab Economics – a US based Greenfield Fab / OSAT consultancy and Semiconductor Investment advisory.

For the aforesaid goal and vision during Pat tenure Intel attempted, M&A for Tower Semi Foundry but it was not realized due to geopolitics, and Faruqui believes that Tan will follow the same path of attempting to acquire a successful and aligned foundry business. He foresees a great technology, operational, footprint and business synergies in Global Foundries as an acquisition target for Intel.

Strategic acquisitions and bold investments

With Tan’s background in venture capital and investments, there could be a shift in Intel’s priorities. To regain its lost leadership, Tan may be open to acquisitions, partnerships, or targeted investments. Unlike his predecessors, who largely focused on internal restructuring, Tan may look outward—leveraging Intel’s deep reserves to acquire cutting-edge start-ups or strike strategic alliances to close technology gaps.

“Tan has a VC background. It wouldn’t be surprising if Tan starts looking at acquisitions to boost Intel’s capabilities in AI, chip packaging, or even alternative architectures like RISC-V,” adds Dhar. Intel’s cash reserves of approximately $22.06 billion and total equity capital of around $99.53 billion give Tan significant leverage.

The last chance for Intel

Tan inherits a formidable challenge. His background in semiconductor design and venture capital makes him well-connected, but Intel’s turnaround requires more than just connections—it demands execution at an unprecedented scale.

Can he convince enterprise customers that Intel’s AI chips can stand up to Nvidia? Can he accelerate product roadmaps to outpace AMD’s steady gains? Can he push Intel’s foundry ambitions forward while battling TSMC’s overwhelming dominance?

The answers to these questions will define not just Tan’s legacy, but Intel’s fate. If he succeeds, Intel could reclaim its place at the heart of the semiconductor world. If he falters, ‘The New Intel’ may end up as just another failed reinvention.