Broadcom CEO Hock Tan claims he has no interest in buying Intel
The boss of $1 trillion chipmaking giant Broadcom Inc. has said he’s not interested in trying to acquire struggling rival Intel Corp., as he’s too busy trying to make his company into an artificial intelligence powerhouse.
In an interview with the Financial Times, Broadcom Chief Executive Hock Tan (pictured) rejected the idea of a hostile takeover outright, saying his “hands are very full” with the task of trying to ride the wave of AI enthusiasm.
Tan said that the company is working on increasing its market share in an AI chip sector that’s currently dominated by Nvidia Corp. “That is driving a lot of my resources, a lot of my focus,” he said, explaining he hasn’t been asked to bid for Intel either.
He explained that Broadcom is no longer interested in pursuing any hostile takeovers, having failed in its last effort, when then-President Donald Trump blocked the company’s bid to acquire Qualcomm Inc. in 2018 on national security concerns. At the time, Broadcom was incorporated in Singapore, but it has since moved to the U.S.
Tan said he is able to make deals only if they are “actionable,” and defined that as meaning he will make a bid only if someone comes and asks him. “Ever since Qualcomm, I have learned one thing. No hostile offers,” he said.
The fortunes of Broadcom and Intel have gone in opposite directions since the emergence of the generative AI trend in late 2022. This year, Broadcom’s market capitalization has more than doubled, rising to $1.03 trillion as of market close Friday. Meanwhile, the value of Intel has tumbled by more than half, and it’s currently worth $82 billion.
In its most recent earnings report, last week, Broadcom said its revenues from AI chips rose more than 220% from a year earlier. The company designs custom AI chips for other companies, and also sells AI infrastructure components used in data centers.
Meanwhile, Intel has fallen behind its rivals in the chip industry after failing miserably in its efforts to catch the AI wave. Although it does offer its Gaudi AI accelerator chips, they’re nowhere near as popular as Nvidia’s graphics processing units, and that shows in its plummeting market value. Earlier this month, CEO Pat Gelsinger surprisingly announced his retirement from the company – with reports at the time suggesting he was forced to do so by Intel’s board of directors.
Gelsinger, who began his career at Intel and returned to the company in 2021, had embarked on an ambitious turnaround plan that involved revitalizing its manufacturing and design businesses, but he failed to improve its fortunes. In August, he announced a record number of job cuts, laying off about 15,000 workers, and suspended the company’s dividends to shareholders. Then in October, Intel posted the biggest quarterly loss in its history.
Intel’s struggles have led to talk of the company being acquired, or at least the sale of various chunks of its business, but interest from buyers remains uncertain. Qualcomm was also mentioned as a possible suitor, but its interest has reportedly cooled.
Photo: Sarbjeet Johal (STACKPANE)/YouTube
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