Breaking up is hard to do, if you’re Neal Sedaka. If you’re a company that dominated the high-end microprocessor business for nearly four decades, a breakup may be hard to swallow even if it’s the right thing to do. 

Shares in the embattled chipmaker Intel soared 16% on Tuesday, after reports that US rival Broadcom and Taiwanese rival Taiwan Semiconductor Manufacturing Company (TSMC) are weighing bids that would split up the iconic firm.

Intel-ligence Failure

As recently as the early 2000s, Intel’s market share was as high as 80%. But it’s been hobbled by all kinds of manufacturing woes and a bunch of really bad decisions, including blowing off Steve Jobs’ offer to make chips for the iPhone, rejecting a chance to buy a stake in OpenAI, and in a historic what-if, choosing not to pursue purchasing a little-known upstart called Nvidia.

In recent years, it has fallen behind on innovation, with competitors focused on AI lapping Intel in terms of growth. Nvidia, of course, became the star of the AI market with its chip designs, while other chipmakers like Advanced Micro Devices (AMD) ate into Intel’s market share. In August 2024, the slow erosion came to a head: Intel said it would cut 15,000 jobs, or 15% of its workforce, after announcing a $1.6 billion second-quarter loss.

The board subsequently ousted CEO Pat Gelsinger in December — a headhunt is still underway, so polish your résumé — and, late last month, Intel reported declining revenue for the third straight quarter and issued disappointing quarterly guidance. Shares are also down 37% in the past 12 months, so there has been little good news for a long time. Which is why the circling acquisition vultures put a smile on investors’ faces:

• The Wall Street Journal reported over the long weekend that Broadcom is eyeing Intel’s chip design and marketing business. The company would only make an offer, the WSJ reported, if another partner agreed to take on Intel’s manufacturing business.
• What a coincidence: Bloomberg reported last week that TSMC is contemplating taking a controlling stake in Intel’s chip factories, apparently at the behest of the Trump administration. The proposal, which TSMC was said to be open to, would also involve some US chip designers taking equity stakes in the plants. Despite its fall, Intel won $7.9 billion in US government funding last year for projects to build out its chipmaking capacity.

To be clear, we’re pretty certain that it is an actual  coincidence, and that Broadcom and TSMC are not working together. But their moves could benefit each other.

Virtuous Vice: Vice President JD Vance gave Intel and other American tech firms some cover last week when he told an AI conference in Paris that more AI chips will be made on US soil and that the administration will work to keep AI technologies from foreign adversaries. Intel, meanwhile, could use some protection from its own recent history.

The fight for AI talent is starting to look like the end of a Marvel movie — a million fighters large and small. 

Bloomberg reported on Monday that Ilya Sutskever, an OpenAI cofounder who left the company after some highly ambiguous involvement in the extremely short-lived ousting of Sam Altman in 2023, is in talks to raise over $1 billion for his own AI startup. Meanwhile, a company founded by another OpenAI alumna, one-time Chief Technology Officer Mira Murati, just came out of stealth mode having already hived off some top talent from Big Tech bulwarks.

Talent Contest

Sutskever left OpenAI in May last year, hanging on surprisingly long after Altman’s surprise firing and re-hiring by the board six months previously, given reports that Sutskever played a crucial role in the board’s decision to give Altman the boot in the first place. Sutskever was quick to develop his new company, Safe Superintelligence, which announced a $1 billion raise last September.

Now it’s on the hunt for investment once again, per Bloomberg, and the new fundraise could bring its valuation to over $30 billion, a source told the outlet. OpenAI is reportedly targeting a valuation of roughly $300 billion, but gaining a tenth of the valuation of the world’s best-known AI startup ain’t bad. Now Murati’s firing up the ovens on her new startup, too:

• Murati’s company on Tuesday announced its name, Thinking Machines Lab. It gave a fairly broad mission statement, saying it wants to make AI systems: “more widely understood, customizable and generally capable.”
• Per a Wired report the company’s first 10 hires included a senior OpenAI executive plus talent from Google DeepMind and Character AI. Thinking Machines Lab confirmed on Tuesday that it now has multiple ex-OpenAI staffers, including the company’s former VP of research Barret Zoph.

Sutskever and Murati aren’t the only OpenAI execs to have struck out on their own. By September last year, only three of OpenAI’s 11 cofounders remained at the company, The Verge reported. 

The Real China-America Trade War: It’s not just poaching season for OpenAI alumni. The Information reported on Tuesday that a Google engineer with 17 years at the company is moving to TikTok-owner ByteDance to lead the company’s foundational AI research team.

You don’t earn a trillion dollars in inflows by thinking small.

In its annual investment report published on Tuesday, Fidelity announced that its assets under management increased by a titanic $1 trillion in 2024, bringing its total AUM to $5.9 trillion. Meanwhile, its total assets under administration — which includes both what it holds in investment funds plus assets in other accounts it manages — increased 20% to $15.9 trillion. It’s the result of a decade-long push to offer investors just about every type of investment vehicle imaginable. And the prize for their efforts? Just some $32.7 billion in revenue and $10 billion in annual profit, both company records.

High Fidelity

Fidelity — a privately-held firm controlled by the Johnson family and led by longtime CEO Abigail Johnson — only reports what’s going on under its massive hood once a year. And as it turns out, 2024 proved just as fruitful for Fidelity as it did for many of its publicly-traded rivals (BlackRock, for instance, similarly scored record inflows and profits last year); AUM increased 20%, revenue 16% and operating income 21%.

The banner year was achieved by being a money manager, a brokerage firm (daily average trades last year hit 3.5 million, a 35% year-over-year increase), a 401(k) pension administrator, and meeting investors wherever they want to be, including with alternative asset classes that previously didn’t even exist:

• In its report, Fidelity highlighted that in the past year, it had launched two of the industry’s first crypto-focused exchange-traded funds, tracking bitcoin and ethereum, respectively. The firm says it now operates over 70 ETFs, comprising $108.5 billion in AUM, up two-fold from 2023.
• The company also highlighted its wealth management unit’s push to offer investors fractional shares last year. Additionally, Fidelity launched and held a successful close of the Fidelity Venture Capital Fund I LP, its “first private equity fund dedicated to venture capital.” 

Passing of the Vanguard: None of Fidelity’s 70 ETF products, however, can claim to be the world’s largest. In fact, as of Tuesday, that title now belongs to the The Vanguard S&P 500 ETF, which surpassed State Street’s popular S&P 500 tracker SPY after pulling in some $23 billion to start the new year, according to Bloomberg data. The toppling of SPY is due in part to Vanguard’s aggressive push to slash fees to attract retail investors.