Just over a month into his tenure, new Intel CEO Lip-Bu Tan is wasting no time putting his stamp on the chip giant, initiating his first significant leadership reorganization aimed at streamlining the company and sharpening its engineering prowess.
An internal memo obtained by Reuters details the changes, which see key semiconductor divisions reporting directly to Tan and place Sachin Katti at the helm of a unified technology and artificial intelligence strategy. This restructuring comes as Intel navigates considerable financial turbulence and competitive heat, particularly in the AI arena, following Tan’s appointment on March 12.
Tan made his rationale clear in the communication to staff, stating, “It’s clear to me that organizational complexity and bureaucratic processes have been slowly suffocating the culture of innovation we need to win.”
He pointed to sluggish decision-making and siloed execution. Addressing this, Intel’s crucial data center/AI and personal computer chip groups now bypass intermediate leadership and report straight to Tan. These units previously fell under Michelle Johnston Holthaus, who remains Chief Executive of Intel Products.
Tan indicated her role is set to change, writing, “As Michelle and I drive this work, we plan to evolve and expand her role with more details to come in the future.” Signalling a more direct approach, Tan added, “I want to roll up my sleeves with the engineering and product teams so I can learn what’s needed to strengthen our solutions.”
Katti Takes Command of Unified Tech and AI Strategy
A key move is elevating Sachin Katti to the combined Chief Technology Officer and Chief AI Officer post. Katti, who previously managed Intel’s Network and Edge Group (NEX) and is also a professor at Stanford University, steps into the CTO role vacated by the retiring Greg Lavender.
His mandate is broad; Tan’s memo specifies Katti “is expanding his responsibilities… As part of this, he will lead our overall AI strategy and AI product roadmap, as well as Intel Labs and our relationships with the startup and developer ecosystems.” This consolidation signals Intel’s strategic bet on AI being integral to future technological progress across its portfolio.
Katti takes the AI reins following Intel’s cancellation of the Falcon Shores AI chip project in January 2025, with the company reportedly shifting towards a new architecture dubbed Jaguar Shores for 2027. The company has faced an uphill battle getting its Gaudi accelerators to effectively compete with Nvidia’s offerings, while also addressing late 2024 stability issues with consumer CPUs like Arrow Lake. Katti’s challenge lies in charting a more impactful and consistent course for Intel in the fast-evolving AI landscape.
Sharpening Engineering and Execution Focus
Further underscoring the engineering-centric push, long-serving technical executives Rob Bruckner, Mike Hurley, and Lisa Pearce will also report directly to Tan. “This supports our emphasis on becoming an engineering-focused company and will give me visibility into what’s needed to compete and win,” Tan explained in the memo.
This move follows the March 2025 retirement of former technology development chief Ann Kelleher, whose responsibilities were distributed between Naga Chandrasekaran (process engineering) and Navid Shahriari (packaging/testing).
Boosting execution is vital as Intel advances its 18A manufacturing process. This node, incorporating next-step technologies like RibbonFET transistors and PowerVia backside power delivery, is essential for the success of Intel Foundry Services (IFS) – a core pillar of Tan’s strategy to attract external chip designers.
While companies like Nvidia and Broadcom were reported in March to be testing 18A, Intel must demonstrate consistent performance and yield, especially with its showcase Ohio factory delayed until 2030 and facing TSMC’s competitive roadmap.
Navigating Competition and Geopolitics
Intel’s internal recalibration happens amid fierce external pressures. Competitor TSMC, fresh off strong Q1 2025 earnings, explicitly denied any joint venture discussions with Intel on April 17, ending recent speculation about such a partnership.
Simultaneously, Tan is restructuring Intel’s government affairs approach, seeking a new leader for the function who will report directly to him, navigating complex global trade relations, including U.S. tariffs impacting China – a region where Tan has previous investment experience.
These strategic shifts are underpinned by the need to reverse significant financial losses. Intel reported an $18.8 billion loss for 2024, its first annual deficit since 1986, heavily impacted by foundry operations. Tan’s actions align with his initial message to employees about creating “The New Intel” by needing to “learn from past mistakes” and “choose action over distraction.” This reorganization marks a tangible step in that direction.
