Changes to Intel’s executive management team by its new CEO, after just over a month on the job, is proof of the sense of urgency in the company to act quickly to compete with rivals Nvidia, AMD, and TSMC, an industry analyst said Monday. Mario Morales, group vice president, enabling technologies and semiconductors at IDC, was responding to a recent Reuters report in which, according to a memo it quoted from by new Intel CEO Lip-Bu Tan, “networking chip chief” Sachin Katti has been promoted to the role of “chief technology officer and artificial intelligence chief.” In the memo, Tan stated that the company’s data center and AI chip group, and its personal computer chip group, would report to him directly, not as before to Michelle Johnson Holthaus, who will take on new responsibilities. Reuters reported that Tan wrote, “I want to roll up my sleeves with the engineering and product teams so I can learn what’s needed to strengthen our solutions. As Michelle and I drive this work, we plan to evolve and expand her role, with more details to come in the future.” Morales said the appointment of Katti, who previously was vice president and general manager of the Network and Edge Group (NEX) at Intel, is a good move, because “it tells us that that Intel needs to really rebalance and focus on AI, because that’s where we’re seeing the most rapid growth for the semiconductor market as a whole. That’s probably the area that has the biggest gap in terms of Intel versus its competition.” Scott Bickley, advisory fellow at Info-Tech Research Group,added, “Intel is facing a monumental uphill battle. After completely opting out of the mobile and AI chip design innovation waves, they are now faced with a slumping x86 legacy CPU business coupled with their high-risk strategy to move to a sub-2nm design produced in their fabs.” He pointed out that this “includes new process technologies such as Gate All Around [GAA] processing and backside power delivery that have yet to be proven at scale. It would be somewhat of a miracle to expect Intel to leapfrog both Nvidia and their fab partner, TSMC, in the AI space. Even if these new chips are successful in terms of design and performance, they may be a product in search of a market.” It is possible, said Bickley, that “Intel could seek to be the fab of choice for the hyperscalers if they can bend the cost-for-performance curve, but that is a longshot and likely to only garner a fraction of this market. Intel’s best hope is a paradigm shift to whatever is post-AI chip architecture … they are not in an enviable position.” Morales added that giving more power to Intel engineers is important, since the company has “lost its way,” and the move should help the organization start making the changes that it needs to make. Now, he said, there is a need for Intel to act more quickly, adding that when Tan spoke at the recent Intel Vision conference in Las Vegas, he presented with a “humbleness and integrity that I think resonated with a lot of partners and developers there, but you can see that he needs to make these moves very quickly. He is basically a month into the role and already making management changes, and I think you are going to see more announcements later this week when they announce their earnings.” Morales said he would be not surprised to see more employee attrition, because when it comes to revenue per employee, “it is not as good as the competition.” Alvin Nguyen, senior analyst at Forrester, said that while having a dedicated person in charge of AI development is a “good move,” the proof will come in what Katti is able to deliver as the new CTO. While the fab partnership with TSMC is a “nice cash infusion” for Intel, he said, it is still unclear what Intel will get out of the arrangement, and investors are “not going to be happy until those details come out.” According to Nguyen, the longer this takes, the less latitude the new CEO will be given. “The problem is that they are nowhere near the top of their game in terms of products or fab technology,” he said. “They are behind Nvidia, they are behind AMD in terms of AI, in terms of data center CPUs and in some cases the workplace CPU markets.” He said that the move by Tan to streamline the organization “gives him the ability to see more of what is going on, but the question at this point is, is he overwhelming himself, or does it give him the ability to provide better guidance?”