During the second quarter, Intel decided to pull out completely from its investment in Arm Holdings, bringing in roughly $147 million from the sale. In addition to this, Intel offloaded its share in the cybersecurity company ZeroFox and cut back its investments in Astera Labs, all as part of a larger strategy to manage costs and regain liquidity amid tough financial times.
Intel’s sell-off of its 1.18 million shares in Arm Holdings, disclosed in a recent filing with the SEC, comes during a period of considerable financial strain for the company. Although the sale brought in $147 million, Intel still reported a $120 million net loss on its equity investments for the quarter, contributing to an overall $1.6 billion loss for that period.
In line with its strategy to cut costs and stabilize its financial standing in a challenging market, Intel not only exited its stake in Arm but also divested from ZeroFox and scaled back its involvement with Astera Labs, known for developing connectivity platforms used in enterprise hardware.
Despite stepping away, Intel’s past investment in Arm was likely based on strategic interests. Arm Holdings plays a crucial role in the semiconductor field, with designs that power the majority of mobile devices—an area Intel wouldn’t want to ignore. Moreover, Intel and Arm are working together on developing datacenter platforms designed for Intel’s 18A process technology. For Arm, having Intel as a potential licensee and partner for others using Arm’s designs is a valuable prospect.
Intel’s interest in Astera Labs was equally strategic, likely to ensure a reliable supply of smart retimers, cable modems, and CXL memory controllers, which are in high demand in datacenters—key areas where Intel aims to maximize its server CPU sales.
Intel’s financial challenges came into sharp focus earlier when it published a lackluster earnings report, leading to a 33% tumble in its stock price and wiping out billions in market value. In response to these setbacks, Intel announced plans to slash 15,000 jobs and undertake additional cost-cutting measures. The company also suspended its dividend as it works to conserve cash and focus on recovery. Selling off its Arm holdings appears to have been driven by the urgent need for financial stabilization.
