Dado Ruvic | Reuters
Intel said Tuesday that it plans to spin off Intel Capital, its venture capital wing, into an independent firm, the latest in a series of structural changes announced by the chipmaker.
Turning Intel Capital, which has $5 billion in assets, into a standalone fund will allow it to raise money from outside investors, Intel said. Until now, the venture arm has been fully funded by Intel.
Intel is coming off its worst year on the stock market since the company went public in 1971 due to a series of missteps and hefty market share losses. The company has been cutting costs and simplifying its business as it spends heavily to build cutting-edge chip factories while vying to reinvigorate its PC chip unit.
In December, Intel ousted Pat Gelsinger as CEO following a troubled four-year tenure. He’s been replaced by two interim co-CEOs, David Zinzner and Michelle Holthaus.
Intel sold or wound down a slew of smaller divisions in the past two years under Gelsinger, and laid off employees last year as part of a cost-cutting plan.
Intel is currently spinning off Altera, a company that specializes in simple chips called FPGAs, with plans for it to become a publicly traded company. It also owns the majority of Mobileye, an Israel-based maker of self-driving parts and software. Last year, Intel took several steps in the direction of turning its foundry business into an independent unit, including naming a board of directors.
In Tuesday’s announcement, the company said Intel Capital’s workforce would continue with the investment firm when it becomes independent in the second half of 2025. A representative declined to comment on specific executives’ plans. Intel Capital could also be renamed.
Intel Capital was established in 1991 and was unique at the time as a venture arm of a large corporation.
Since then, that model has been replicated across Silicon Valley and in other industries, with companies including Google, Microsoft, Salesforce, Unilever and BMW jumping into the business. Comcast, the owner of CNBC’s parent, NBCUniversal, started Comcast Ventures in 1999.
While Intel was early to corporate venture capital, it isn’t the first tech company to spin out its investment arm. In 2011, SAP turned SAP Ventures into an independent firm, later naming it Sapphire Ventures.
Corporate venture capital peaked in 2021, when firms in the space raised $156 billion and participated in close to 3,800 deals, according to the National Venture Capital Association. That was the same year that the broader VC market hit record levels, but startup investment numbers have since declined dramatically due largely to higher interest rates, which began going up in 2022.
WATCH: Intel plans to take its chip subsidiary Altera public