Intel CEO Who Won Over Trump Now Needs a Breakthrough

0:00 For those of us old enough to remember Intel in the 80s and 90s,

0:03 and then what happened in between?

0:05 That's something.

0:06 And my boy Frank Urie, my running buddy from Salomon Brothers,

0:09 he's retiring from as chairman of the board in a couple of days.

0:12 He's had a heck of a run here to finish up his career.

0:15 We want to talk to Sarah Frier, Bloomberg Managing Editor.

0:18 Um, what's going on at Intel?

0:20 They finally gotten, I guess, the I tailwind.

0:23 It sure looks like it.

0:25 Well, there's that, but it's actually a, you know,

0:29 an even bigger process by Lipton, the new CEO.

0:32 He has spent the last year talking to all

0:36 of these other major leaders in tech and in the world,

0:40 and getting them on his side.

0:42 Right.

0:42 So he's formed an alliance with President Donald Trump.

0:45 The US is now a major investor in Intel.

0:47 He has Elon Musk saying that they're going to partner on building factories.

0:51 Apple is it has talked about um, potentially using Intel um,

0:56 and Nvidia Nvidia as Jensen Wang has explained that they think that the the CPUs

1:03 that Intel makes are going to be back in demand during the eye boom.

1:07 So all of those factors have led to this incredible tear in Intel's stock.

1:12 We're back to a level we really haven't seen since the dot dot com boom.

1:16 It is truly remarkable when you look at the advances.

1:20 I mean, the gain in Intel has eclipsed the gain in micron.

1:23 And you know, Paul, you and I talked about how micron just

1:26 went on this bananas tear because of the lust for memory chips.

1:30 And Intel has surpassed all that.

1:32 You mentioned, Sarah, that the U.S.

1:33 government has a stake in Intel.

1:35 It's a 5.5% stake right now,

1:37 the third biggest shareholder after Blackrock and Vanguard,

1:39 which of course represents index funds,

1:42 is the US government and activist shareholder in Intel.

1:45 I mean, is there a pushing by the U.S.

1:49 government towards what Intel should be doing?

1:53 Well, I think it definitely adds to the momentum of Intel.

1:57 I think there's there's, um, you know,

1:59 this sense that if you support Intel, you support American manufacturing.

2:03 And Donald Trump has certainly, um,

2:06 celebrated himself as the, you know, person who who struck this deal.

2:11 But what Ian King's reporting reveals in the story is

2:14 that it really took some convincing on the part of his allies.

2:17 He had people in the industry, including Michael Dell, um,

2:21 calling Donald Trump, asking him to give Liv Wootton a chance.

2:25 And then once the two of them met,

2:28 um, Louboutin was able to convince Trump to, um,

2:31 to really bet on the company in a in an unusual way.

2:36 I mean, this is very unprecedented,

2:38 but that led to a lot of these other stakes that helped Intel balance sheet.

2:43 Now, um, what Ian reveals in the stories is there's

2:48 the second phase of the turnaround that needs to happen.

2:50 For all of the optimism, for all of the, um,

2:53 work that's been done on the external perception that Intel can achieve,

2:57 uh, a place of prominence in the eye boom,

3:01 that that it really, um, can deliver on, uh, returning to, to prominence.

3:06 There's still a lot that needs to be fixed in terms

3:10 of the quality of its products and the quality of its factories,

3:13 and that's what happens next.

3:14 So what is the thinking out there in Silicon Valley, sir?

3:17 Is this something that, again, when one could argue that a lot of the stock

3:21 price appreciation was kind of by the rumor?

3:23 Uh, now the question is they have to deliver is

3:26 the expectation that they will be able to do that.

3:30 Well, I think now that Liberty has had

3:32 these allies that are counting on him to do it,

3:36 he he's well set up to, um, but, you know,

3:38 in speaking with us in the first interview

3:41 he's given as the CEO to a news outlet,

3:44 um, he, he acknowledged that he still has a lot of work to do.

3:47 He still has to build that.

3:49 He's still recruiting leaders that he trusts.

3:52 And what we learned, um, from conversations with current and former employees,

3:55 is the way that he leads is very different than how Intel is used to working.

4:00 He's a high level thinker.

4:02 She's not going in on the on the details.

4:04 He picks people that he believes in and then backs them

4:08 the same way you you might see in venture capital investing.

4:11 Um, you know, he's on many company boards.

4:14 He has a long history with that.

4:16 But that could be risky for a company like, Like,

4:19 uh, Intel where the devil really is in the details.

4:21 The chips need to be, uh, the right quality to sustain those customer deals,

4:26 to even get those major customers on board.

4:29 Get them to take a bet on the company.

4:31 So they have a lot of work to do in the actual manufacturing, the actual design.

4:37 Um, to, to not have to outsource it as much as they've been doing it,

4:42 to bring it back in-house and, um,

4:44 prove that they can, that they can deliver very quickly.

4:47 Sara Lipton has only been, uh, CEO of Intel for about 1.2 years.

4:51 Not long at all.

4:53 But it feels like a long time.

4:55 Um, how patient are investors willing to be with him?

4:58 I think as long as what we're hearing about,

5:01 you know, CPUs in in the eye boom being really necessary.

5:07 If that continues, I mean,

5:08 that's going to be definitely a positive boost for them.

5:12 They just have to really get that business.

5:14 They have to get it.

5:15 Um, and they can't let it, uh, they can't feed it to rivals.

5:19 And then they'll be okay for a little while

5:21 and we'll buy him time to get everything else right.