Intel divests venture capital arm

Intel divests venture capital arm

Intel announced plans to spin off Intel Capital, the company’s venture capital arm, and transform it into an independent company. It is the latest in a series of structural changes the chip maker is making.

This, writes CNBC. Intel Capital, which manages a $5 billion portfolio of assets, will separate from Intel Capital, which will allow it to raise money from outside investors, Intel said. Until now, Intel has funded the venture capital arm entirely.

New name for Intel Capital

In the announcement, the company reported that Intel Capital staff will continue to work at the investment firm when it becomes independent in the second half of 2025. A spokesman declined to comment on specific executives’ plans. Intel Capital could also be renamed.

Intel is experiencing its worst stock market year since going public in 1971. This is due to a series of missteps and a significant loss of market share. The company is cutting costs and simplifying its operations. At the same time, it is investing heavily in building advanced chip factories and trying to revive the PC chip branch.

Round of layoffs

In December, Intel fired CEO Pat Gelsinger after four years of leadership. Two interim co-CEOs, David Zinzner and Michelle Holthaus, replaced him. Under Gelsinger, Intel sold or closed several smaller divisions over the past two years. Last year, the company also laid off employees as part of a cost-cutting plan.

Intel Capital was founded in 1991 and was unique as a venture capital arm of a large company at the time. Since then, this model has been copied in Silicon Valley by companies such as Google, Microsoft, and Salesforce.

SAP also divested investment arm

Although Intel was a pioneer in corporate venture capital, it is not the first technology company to spin off its investment arm. In 2011, SAP turned its SAP Ventures into an independent company, later called Sapphire Ventures.

Corporate venture capital peaked in 2021, when companies in this sector raised $156 billion. According to the National Venture Capital Association, they were involved in nearly 3,800 deals. That was the same year the broader VC market reached record levels. Investment in startups has fallen dramatically since then. This is mainly due to interest rates, which began to rise in 2022.