Intel has changed its mind about spinning off Intel Capital, its long-standing venture capital arm.
In a major shift, the company announced during its Q1 earnings call that Intel Capital will stay in-house and continue to operate under Intel’s direct oversight.
A Strategic Reversal
Intel CEO Lip-Bu Tan shared the update, stating the company will no longer pursue a spinoff. Instead, the focus will be on making selective investments and improving the company’s financial position.
“We have made the decision not to spin off Intel Capital,” Tan said. “We will work with the team to monetize our existing portfolio, while being more selective on new investments that support the strategy we need to get our balance sheet healthy and start deleveraging this year.”
This marks a significant shift from Intel’s earlier announcement in January, when it revealed plans to let Intel Capital operate independently by the third quarter of 2025.
A Plan That Almost Happened
The idea of spinning off Intel Capital has been discussed several times over the years. Earlier this year, Mark Rostick, Intel Capital’s VP and senior managing director, expressed confidence in the venture arm’s performance. He noted that despite challenges in the venture capital space, Intel Capital had managed to deliver strong returns and successful exits.
“We thought our track record merited attention from outside investors,” Rostick told TechCrunch. “We felt like we could position ourselves as a bit of an outlier.” Reports also suggested that the proposed spinoff had backing from former Intel CEO Pat Gelsinger, adding weight to the initiative.
Why the Change?
Although Intel hasn’t shared full details behind the reversal, the company appears to be shifting focus toward financial stability. Keeping Intel Capital in-house may give Intel more direct control over investment strategies that align with its broader goals, especially as it works to decrease debt and optimize resources.
Looking Ahead
Intel Capital, which has operated for 34 years, will continue to fund startups and innovative companies, but with a sharper eye on supporting Intel’s core strategies. As market conditions evolve, Intel seems to be tightening its belt while ensuring its investments stay closely tied to its future direction.
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