Building Intel: Pat Gelsinger on Engineering the AI Era

Hey, great to be with you today, Jody. Thanks. And look forward to the conversation.

Well, you know, when I started at Intel, 18 years old, I felt almost like I was going to the pinnacle, right? You know, this place, microprocessors and semiconductors. It was just such a, you almost fanciful, right? I call it the Cinderella career at the time. And then you know starting as a technician going to school, you know just so many pieces of that and then as I like to say I grew up at the feet of Grove, Moore, and Noyce, right? Knowing them all, you know these legends of the industry. And I started so young there I joke I went through puberty at Intel, right? It was just like, man, you know it was really so shaping being mentored by Andy Grove. And early in my career I wrote this crazy statement: be CEO of Intel.

It was about 22, 23, right? And when I wrote it, it was such a crazy thing, right? I write mission statements and one of the, you know, really sort of develop, okay, what do I want to get done in life. And when I first wrote it, it was like it was just a dream, you know, I had no belief that it could happen. And then here we are as I'm progressing, all of a sudden I'm in the room with them and then all of a sudden it became I can do this. And then when I left it was like, hm, I guess that wasn't the career. And then coming back was like, okay, I had written this, you know, at that point, you know, 30 years earlier and now the opportunity to come back and really to, I'll say, finish what I felt I started in my career and the opportunity to help in a time where the company needed to be reset and reinvented. So it really was as you would say a full circle.

You know, when I left Intel I went to EMC.

And it was really, you know, the CEO Joe Tucci, well known in the industry, you know, he said I am going to coach you, right? You know, it was very much, you know, develop and I had the aspiration to be a CEO and just everybody on the EMC team and board it was like, you know, okay, you are Joe's successor. Okay, right, I wanted to be a CEO. I didn't feel I had that opportunity at Intel at the time. So leaving was hard after 30 years, right? And then three years at EMC and then it was an in the family move because they had the majority ownership of VMware. Then coming back to California, becoming that first CEO and, you know, under my leadership VMware had a very good eight years. You know, we tripled the size of the company, you know, tripled the market cap of the company, just seen as a very successful tenure. And then going back to Intel and that memory of writing my mission statement 30 years prior, it was like, okay, maybe this is it to come back and do that job.

Yeah, it is. And you know, sometimes they come true and sometimes they don't, but you know, they drive you to make yourself better, you know. And I remember sitting in rooms where I'd hear Gordon or Bob or Andy say something and I'd start asking myself the question, hm, if I were CEO, would have I said that? Could have I said that? Should have I said that? Right? You start asking yourself different questions that elevate your leadership.

Yeah.

Well, you know, there's so many emotions at this point and, you know, as I'm coming back to take the job, the board is recruiting me to do this, you know, my mission statement that I had written 30 years hence. And, you know, the company was in worse shape than it looked, right? Because we were in COVID. And in COVID what happened to PC demand? Explodes, you know, so the business looked better than it really was at the time. And, you know, they had fallen behind on process technology. They went from having a two to three year lead to a two to three year lag. How did that happen, right? You know, they hadn't produced a chip on schedule for five or six years. You know, they had taken all of their capital and given it back to shareholders, you know, $70 billion was buybacks and dividends to shareholders and they hadn't built a new factory, you know, in a couple of decades. It was like this is the preeminent semiconductor company. What's going on? So to reset that, you know, okay, you know, it was a clear massive assignment and the board was, you know, yeah, we need to change the direction of the company and even though it looked better, you know, there was a lot of things that needed to be addressed.

When you step into one of those roles, you have a view, right, of what is there. And I had a pretty good view. I had written a strategy statement, shared it with the board of directors, got everybody's buy in. I said, you know, if we go down this journey, you're agreeing to my strategy and agreeing to me to lead it. So, you know, there was an understanding, but you never really know until you're in the chair. So there were definitely some surprises and you're sort of like, 'Wow, I didn't expect that.'

Yeah. Not good things.

Well, I think they saw this need for a technical leader again. I think they also saw, you know, the passion I had, you know, for the company, for that heritage, you know, where, you know, it was like, you know, I was never like one of the founders of the company but I grew up at the feet of the founders of the company. So I think there was somewhat that soul of Intel, right, you know, that I was bringing to the table, you know, the strategy that I was laying out, you know, to rebuild the technology engine, the manufacturing, the agreement to start the foundry processes. So they were buying into the strategy and obviously it was this, you know, okay, our son is coming back home. So there did have that little bit of a, you know, kind of prodigal, you know, whimsical tale to it. And for me, like I said, this was my dream job, you know, decades earlier and those things came together and, you know, as it did there was a lot of enthusiasm inside of the company for my return.

At least three, at least three wars at once. And I'd also remind that this was still COVID, right? I was in the CEO chair for over a year before I actually had an in-person staff meeting. You know, it really was this, oh wow, there's so much to go on to rebuild the company, to get manufacturing underway, technology, you know, the geopolitics, the supply chains, the CHIPS Act, right, was underway. So, you know, there's an awful lot going on at the time.

Better, not good enough.

And, you know, better, okay, we're rebuilding manufacturing in the US. Big factories are going in, CHIPS Act, you've seen big announcements not just, you know, from Intel but TSMC, you know, the recent Micron announcement, Samsung, SK Hynix. So, you know, investment is underway. Obviously, this administration is treating the CHIPS Act differently than the last administration. You know, we just announced some of the key R&D projects like Exite, so getting that leadership position underway. So, there's a lot of good things going on, but I'd also say we have a long way to go. You know, our supply chains are still much too fragile. We're still much too dependent on Asia and Taiwan. You know, the singular failure point of supply chains. Okay, that's not okay for something this important. We need more R&D leadership in the US again. So I say we've clearly made improvement over the last five years, but a lot more needs to be done.

Of course. Of course. And, you know, I think there's always these pros and cons and, you know, as I think about it, you know, industrial policy, what you're trying to say in industrial policy, this industry, right, is so important to our livelihood, whatever that may be, maybe it's national security, you know, maybe it's supply chain resilience, you know, maybe it's associated with, you know, manufacturing economics, but, you know, industrial policy says that industry needs to accomplish certain objectives. Okay, how do I get those objectives done? And if we look at the semiconductor industry, you know, there was never a vote of Congress 30 years ago saying, you know, we just don't want to have that dirty, ugly, terrible semiconductor manufacturing in the US, right? There was never that vote. However, there were votes for industrial policies throughout every Asian country to build those industries, to subsidize those industries, to create tax policies for those industries, to create industrial infrastructure for those industries. And 30 years later, guess what? They had those industries, right? You know, so I'll say, you know, industrial policy is around building the structure that you need to accomplish the policy objectives. And in this case, you know, our policy objectives were, I'll say, undermined. They were deteriorated by high margin short-termism in Wall Street. You know, we are not as a nation creating incentives for long-term capital heavy industry investments, right? Period. So, guess what happens to those long-term capital heavy manufacturing investments? They don't happen here. Because no good CEO can possibly say, 'That's right. I'm going to build a factory that doesn't get an economic return for a decade, but it's the right thing.' You know, no CEO can survive those kind of decisions. So, good industrial policy needs the right economics sitting underneath it. You know, it needs the right objectives, the right regulatory support. All of those things need to be in place. And if that means the government takes stakes in some of those companies, I say that's a reasonable thing if that is the means to accomplish the objectives of industrial policy. And, you know, as you say, it isn't necessarily what a free market view would say is right. But we also saw that the free market view of our industry means we do all manufacturing in Asia. That's not okay. We need resilient supply chains and our industrial policy objectives must accomplish resilience in our supply chains. Semiconductors are way too important for our nation, for our industry, for our security, for our world. They must become more resilient. And COVID showed us they weren't.

Um, you know, to me, I look at it and say I'm okay with that if it causes more manufacturing, more semiconductor R&D to occur in the US. If it helps that to occur, then it's the right thing for the US government to do. And I say them taking a 10% stake doesn't cause anything to happen. It's like as a result of that, does it catalyze this broader set of industrial policy? That's the question. And I'll say it could, right? And so far, you know, Intel stock has responded well as a result. So clearly the market thinks it's helpful, but it really is, do we build more in the US? Do we lead more in the US? Do we have more R&D in the US? That's the only thing that matters, right?

Yeah. And I think that is one of the things and, you know, the CHIPS Act was clearly a bipartisan act. So we're trying to create, you know, that view that we're not susceptible to, you know, CHIPS Act started under Trump one. It was put in the law under Biden. It's being now implemented differently under Trump two. So hopefully it creates more continuity, but, you know, I think Chris Miller's book on Chip War describes very clearly, you know, these were decades long industrial policy objectives by the Asian countries and, you know, they succeeded.

Well, it was a hard transition. It wasn't what I had in mind at the time. You know, I wanted to finish the job. I had always said it was five plus years to get it done. And when I was given less than four and I saw that part of the pieces were coming into place that was difficult. And clearly today, you know, I've, you know, gone through, you know, my own personal views of that and I'm at a great place, right? You know, the things I get to do with family, my faith, my philanthropies, my deep tech investing, I am in a great place. But I also look back and say, hm, you know, why did those things happen? And clearly seeing for instance some of the foundry objectives, seeing 18A when Intel announced some of the chips coming on 18A, their Panther Lake announcement. I took great pride in that because those are things, you know, I had worked years on making those things work and getting Intel back competitive in process technology. And, you know, 18A, five nodes in four years, those were my strategies and, you know, that we're leading and here we are a year plus later the strategy hasn't changed. So in that sense, you know, the continuity of what I began has continued, right, really unchanged since I left. You know, would I have liked to be finishing? That was my goal. But I'm in a better place today. So I don't have remorse over it. But, you know, that was a difficult day. You know, I had worked for 45 years and all of a sudden I'm not in a leadership role in a major company. Wow, that was jarring. So it was like, okay, what is next? And, you know, God clearly has brought me to a place that I'm thrilled by the things I can be influential in and I can influence so many more things today.

You know, one is I always want to put myself in and I advise people that you should have visions bigger than yourself, right? And, you know, particularly in leadership roles, when you have a vision bigger than yourself, it's empowering for people to come around you, right? You go, 'Hey, you know, yeah, we're here to build a great business, but let me tell you what we want that business to accomplish.' You know, that just creates this deep commitment, this alignment of objective, you know, almost this missional, right, fervor, right, that emerges. And I'd say, you know, live your dreams that way. And if you're waking up tomorrow, you know, being conservative, you know, not taking those risks, not, you know, I'll say consumed by something bigger than yourself, you're not doing everything that you can do. Okay? Right? Everything that you're, you know, now that can be very uncomfortable, right? You know, one of my friends always likes the phrase, you know, how you can tell a pathfinder by the arrows in their back, right? You know, sometimes you get criticized and so on. You know, you go through a tough transition like mine, you know, it's sort of like, wow, you know, markets aren't necessarily kind on those things. You know, often people driving turnarounds are not the people to finish turnarounds, right? Right. You know, that's often the case. And you sort of say, but I wanted to be the one, you know, crossing and, you know, on the medal stand at the finish. Most businesses don't have medal stands, right? You know, it's not like you just, you know, reach a finish line. They're, you know, always passing the baton, you know, to the next. I also say, you know, to those people, seldom do we grow, seldom do we mature in success? You know, it's when you're in change, challenge, failure, that's when you grow because you're looking, okay, what could have I done better? How could have I done that better? You know, you spend time really ruminating on all aspects of your performance and that's where you grow. You know, when you succeed, 'I was pretty good, wasn't I, Jody?' Right? You don't grow in success, right? You grow when you go through those hard times and that's really where you mature. You know, you don't wake up in the morning and say, 'God, give me a really tough day today so I grow,' but you actually realize, 'God, thank you for giving me the tough days, the tough times, the tough transitions because that is where I grew.' One of my mentors says, 'Pat, have you said thank you for taking you out of Intel?' And I said, 'That's hard, but I've gotten to the point that I can say yes, thank you. I'm in a better place.' Not the place I thought I was going to be, but I'm in a better place as a more mature, you know, more capable with a lot of new learnings on me and a much bigger platform to influence than I ever had before.

Well, obviously, you know, one of those is Gloo, you know, building a technology platform for the faith ecosystem. Yeah. At the Gloo headquarters, you know, building a technology platform for the faith ecosystem. And the faith ecosystem is over a trillion dollars of economic impact and its technology is lousy. You know, every time you give a donor dollar to your church or to your charity, it's a bad dollar, right? Because their technology is so bad. So creating, you know, the technologies that make that dollar not a dollar but make it a $1.10 or a $1.20, right? So that's something that I'm quite excited about and I've been, you know, giving philanthropically for decades and seeing the weakness in technology of the faith and flourishing community. So that's exciting to me. And then obviously my deep tech investing. I'm working on some of the hardest, most interesting, most compelling, you know, technologies of human history. And that's pretty compelling for a guy like me.

Well, you know, I just saw Lip-Bu recently and he was quick to remind me that, you know, we haven't changed your strategy, Pat, right? So, in that I, you know, I will say the first and at the top of the thing, okay, you know, he believes in the strategy. He's continuing to execute the strategy. And I just appreciated that he recognizes, okay, that I'm continuing what we started together. So, you know, that was quite gratifying and, you know, I'm just so proud of the teams there because this has been hard, right? You know, they were years behind in process technology and restarting that engine, you know, to get back to a leadership technology. 18A is great. 14A is going to be better. You know, they're leading on key things like EUV and High-NA, you know, getting that mojo back of leadership, you know, and I'm just so proud of the Intel teams for, you know, continuing because, you know, once you fall behind, oh, in this industry, Jody, it is so hard, so deeply difficult to get back right in the front and I'm proud of the teams for doing that.

You know as we know in process technology, logic technology, boy these are, you know, projects are decade long, right? And when you fall behind, oh, catching up is so difficult. You know, you make a bad mistake in a particular technology and obviously one of them, you know, Intel didn't use EUV, right? They helped to create EUV, how could they make that decision? So getting back into the game and getting the new transistor design, backside power, you know, these are core innovations and, you know, like any good industry you need good strong companies competing, you know, for the best idea and holding each other accountable and, you know, I'm thrilled to see Intel back in the game.

No matter who you are, everybody wants to see Intel succeed.

Okay. Yep. That's home.

Yeah. And, you know, a German farming family, work, right? And you didn't get complimented. You had the opportunity to work more, right? You know, just very, you know, ingrained. A lazy day, you didn't have to get up to milk, right? You know, you could sleep in until 5:00. You didn't have to get up at 3:30 to be out milking. That was the lazy days, right? And, you know, you're out in the farm working starting at dawn, right? And you work all day. You're, you know, ravenously hungry by the time you get in at night. And, then you're so tired you just collapse and go to sleep. You know, it really is, you know, those long hard work days. And, you know, it wasn't that you didn't have fun, you know, but the fun was sort of in the work as well. Growing up as a kid, I always thought I was going to be a farmer, you know, but my dad was number nine of 10 kids. And my, you know, grandfather said, you know, there's enough farms in the family. Just work with your siblings. And as I was growing up, you know, it's sort of like, hm, I'm going to be a farmer. And then it's like, well, my dad doesn't have a farm, so I have no farm to inherit. And then it was always, what next? And my parents, both of them were first through eighth grade, one room schoolhouse educated. Never had the opportunity for high school, much less college, as well. So, growing up, it was get your PhD. I don't even think they knew what a PhD was, but get it. You know, you need to be educated. You know, they forbade us.

Oh, yeah. It was, you know, and that opportunity for education, you know, both of them grew up speaking Pennsylvania Dutch, you know, a low form of German. They forbade us to do that because that was the poor farmer's language. You will learn English, you will go to school, you will get educated. So deeply ingrained in us. So, you know, then when the opportunity to, you know, take a scholarship exam, you know, skip my high school years, go into technology, you know, they were super excited, super supportive, of that to really, I'll say, leap out of the farming community. They weren't so sure about moving to California, though. You know, they're crazy out there in California. They would have much preferred me to, you know, find my dream on the East Coast. But lo and behold when Intel came recruiting, you know, the die was cast and the journey began.

Yeah. And it was somewhat accidental. You know, I started to work in electronics, you know, taking things apart, trying to put them back together. And, you know, went to a program, Berks Vo-Tech, as it was called, where, you know, I went in the electronics technician thing, doing some electrical wiring and, you know, blowing fuses at my house, trying to make things work. But I'll tell you, Jody, the first time I touched a computer, I was hooked. Right? To me that was just like, you know, I'm not sure if the heavens quite opened that day, but it was just like, okay, close enough. This is what I want to do, right? Where the first time, and I remember it was one of the early PDP-4 or PDP-8 machines we were doing it. We had some punch card things. You could write teeny programs, you know, little single board, you know, four-bit and 8-bit computers. Oh, I just fell in love, right? And that began the journey. And then the idea of coming to Intel, wow, they're inventing the microprocessor there, right? And when I was given the opportunity to interview with Intel, you know, I felt like I was going to the Holy of Holies, right? You know, designers, they don't even touch the ground. They just float, right? To me, it was like such a great honor to come to Intel, even though, you know, I really didn't think I was going to land there.

You know, I was running toward, right? You know, for, you know, I was a little bit bewildered. I always thought I was going to be, you know, inheriting the family farm. That wasn't going to work. I liked working on the farm. I liked working with my dad, right? So, it was a little bit bewildering that I wasn't going to do that, you know, but like I say, when I started to study electronics and computers and touch it, it was like I was so hooked. It's like, okay, I am running to this. This is where God is calling me. I'm good at it. And, I'm going to make a career here. I always thought I'd go back to the East Coast in some fashion. So when we started to make a family out here, it's like, okay, we're west coasters. We'll be here forever.