Intel Sells Its Arm Shares, Reduces Stakes in Other Companies

In the second quarter, Intel sold its entire stake in Arm Holdings, raising about $147 million. At the same time, Intel sold its stake in cybersecurity firm ZeroFox and reduced its stake in Astera Labs, all as part of broader efforts to manage costs and recover cash amid deep financial challenges.

The sale of 1.18 million Intel shares to Arm Holdings, as reported in a recent SEC filing, comes as the company grapples with significant financial losses. Despite a $147 million profit from the sale, Intel reported a $120 million net loss on its equity investments for the quarter, part of a larger $1.6 billion loss Intel faced for this period.

In addition to selling its stake in Arm, Intel also abandoned its investment in ZeroFox and reduced its participation in Astera Labs, a company known for developing connectivity platforms for enterprise hardware. These steps are consistent with Intel’s strategy to reduce costs and stabilize its financial position amid ongoing market challenges.

Despite the sale, Intel’s past investments in Arm were likely driven by strategic considerations. Arm Holdings is a significant force in the semiconductor industry, its designs are used in most mobile devices, and Intel would understandably want to solve this problem. Intel and Arm are also collaborating to develop data center platforms tailored to Intel’s 18A process technology. In addition, Arm may view Intel as a potential licensee of its technology and a valuable partner for other companies licensing Arm’s designs.

Intel’s investment in Astera Labs was also strategic, as the company likely wanted to ensure a stable supply of smart timers, smart cable modems and CXL memory controllers that are used en masse in data centers, and Intel is certainly interested in selling as many processors as possible for data centers. as far as possible.

Intel’s financial woes were highlighted earlier this month when the company released a disappointing earnings report, causing its share price to fall 33%, wiping out billions of dollars in capitalization. To face these difficulties, Intel announced plans to cut 15,000 jobs and make other cost cuts. The company also suspended its dividend, signaling the depth of its efforts to preserve cash and focus on recovery. When it comes to selling Arm shares, the need for immediate financial stabilization appears to take precedence, leading to this decision.