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Intel Weighs Sale of Networking and Edge Unit in Strategic Refocus Under New CEO

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Intel is considering divesting its networking and edge computing division — previously known as NEX — as part of a broader strategy to streamline operations and refocus on its core strengths in PC and data center chips, according to sources familiar with internal discussions.

Under new CEO Lip-Bu Tan, the tech giant is evaluating the relevance of its diverse business units to prioritize areas where it maintains market leadership. Tan emphasized at an event in Taipei that Intel commands 68% of the PC chip market and 55% of the data center chip market, and plans to “expand and build on” those domains.

Although no formal sale process has been launched yet, Intel has initiated early-stage discussions, spoken with third parties potentially interested in the NEX business, and interviewed investment banks to possibly advise on the transaction. However, no advisor has been officially retained, and options remain open.

Sources indicate that the networking and edge unit — which generated $5.8 billion in revenue in 2024 — is no longer seen as essential to Intel’s growth plans. The company now folds NEX’s financials into its broader PC and data center segments, eliminating separate reporting.

The telecom-focused segment within NEX is especially seen as misaligned with Intel’s new direction, and competitors like Broadcom dominate significant parts of the networking market, further reducing Intel’s strategic incentive to compete there.

While Intel has not committed to a full divestiture, it may explore partnerships, stake sales, or restructuring alternatives. The potential NEX sale follows other recent portfolio adjustments — notably, the $4.46 billion sale of a majority stake in its Altera unit to SilverLake in April. That move came after previously planned IPO ambitions for Altera under former CEO Pat Gelsinger.

Despite this refocusing, Intel continues to face pressure as it loses ground in the PC and data center markets, making Tan’s efforts a critical pivot point for the company’s future trajectory.

Intel Shareholders Approve CEO Compensation and Equity Incentive Plan Amid Leadership Shift

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Intel shareholders on Tuesday approved a new equity incentive plan designed to bolster stock reserves for attracting and retaining talent, as well as a $42 million stock-based compensation package for newly appointed CEO Lip-Bu Tan. The vote took place during the company’s first shareholder meeting under Tan’s leadership.

Intel shares fell 1.6% in early trading, extending a 36% decline over the past year, as investors digest the company’s ongoing leadership and strategic shifts.

Tan, who succeeded Pat Gelsinger in March after the board lost confidence in his high-cost turnaround efforts, will have his compensation tied to Intel’s future stock performance. Tan has already initiated a restructuring plan, which includes flattening the corporate hierarchy, cutting excess middle management, and recalibrating Intel’s artificial intelligence roadmap.

Shareholders also approved the current board of directors, although three members did not seek re-election. Meanwhile, three shareholder proposals were rejected, including:

  • A call to reassess Intel’s operations in Israel,

  • A demand for new charitable giving transparency, and

  • A proposal to allow shareholders to act by written consent.

Tan said he plans to capitalize on Intel’s established positions in the PC and data center markets to deliver more competitive AI products, signaling a strategic refocus in an increasingly crowded chip landscape.

Intel CEO Lip-Bu Tan Restructures Leadership, Appoints New Head of AI, Internal Memo Reveals

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Intel’s newly appointed CEO, Lip-Bu Tan, is initiating a significant leadership shakeup aimed at streamlining operations and strengthening the company’s engineering focus. In a recent internal memo obtained by Reuters, Tan revealed that several of Intel’s core chip divisions will now report directly to him, flattening the organizational structure in a move designed to bring greater agility and responsiveness to the semiconductor giant.

Among the key changes, Sachin Katti—formerly head of Intel’s networking chip division—has been promoted to serve as both Chief Technology Officer and head of Artificial Intelligence. This dual role signals the growing importance of AI in Intel’s strategic roadmap, as the company seeks to reassert its position in a highly competitive global market. The data center and AI chip group, along with the personal computing chip group, are now under Tan’s direct supervision, bypassing previous layers of management.

These leadership adjustments mark the first major strategic shift since Tan took the helm last month. They reflect a hands-on approach to reforming Intel after years of stagnation and missed opportunities in advanced chip manufacturing. Michelle Johnston Holthaus, who previously oversaw the groups now reporting to Tan, remains a key figure as CEO of Intel Products. Her responsibilities will be expanded into new areas as part of a broader reorganization still in development.

“I want to roll up my sleeves with the engineering and product teams so I can learn what’s needed to strengthen our solutions,” Tan wrote in the memo. His remarks underline a more engaged leadership style, with a clear emphasis on execution and product innovation. The restructuring also comes as Intel continues to face challenges from competitors and grapples with maintaining its technological edge. Tan’s early moves suggest a decisive effort to simplify operations and refocus the company on its engineering roots.