Intel to Spin Off Venture Arm Intel Capital Amid Strategic Restructuring

Chipmaker Intel Corporation has announced plans to spin off its venture capital arm, Intel Capital, into an independent entity. This move is expected to enhance operational efficiency and flexibility and allow the venture unit to raise funds from external investors. Earlier, Intel had been its sole financier.

Intel Capital, which manages a $5 billion portfolio, has played a key role in the company’s investment strategy. By separating it into a standalone company, Intel aims to provide the unit with greater autonomy, enabling it to focus on maximizing asset value and innovation. 

Intel Capital’s transition into an independent company is expected to be completed by the second half of 2025. The investment arm will continue to operate with its existing team, ensuring a seamless transition. The venture fund may also adopt a new name after its separation. Intel will remain an anchor investor in the newly formed entity, maintaining alignment with its strategic goals while granting Intel Capital the autonomy to attract external funding.

Founded in 1991, Intel Capital has pioneered corporate venture investing, managing over $20 billion across 1,800 companies globally. Its investments have focused on key technology areas such as silicon innovation, cloud computing, and frontier technologies, contributing over $170 billion in market value creation in the past decade. 

Despite the spin-off, Intel Capital has remained active, recently leading a $36 million funding round for Orchid Security, a startup specializing in identity-first security orchestration.

This restructuring will help the company simplify its operations and cut costs amid increased competition from industry leaders like Nvidia and TSMC. The company has initiated layoffs, reducing its workforce by approximately 15% to save $10 billion by 2025. Additionally, Intel has suspended its stock dividend and divested smaller business units, redirecting resources to core operations, including advanced chip manufacturing and its PC chip business.

The changes follow a challenging period under former CEO Pat Gelsinger, whose tenure saw Intel’s stock price drop significantly. Gelsinger was replaced in December 2024 by interim co-CEOs David Zinsner and Michelle Johnston Holthaus. The new leadership has emphasized streamlining operations and exploring potential structural changes, including separating Intel’s product development and manufacturing divisions. 

Earlier today, Orchid Security, a startup specializing in identity security, announced it had raised $36 million in early-stage funding. Intel Capital and Team8 led the round. 

Intel’s decision to spin off its venture arm mirrors similar moves by other technology companies, such as SAP, which transformed its SAP Ventures into Sapphire Ventures in 2011. 

Corporate venture capital peaked in 2021, with $156 billion raised across nearly 3,800 deals, according to the National Venture Capital Association. However, investment levels have declined significantly since 2022 due to rising interest rates. Intel Capital’s separation is seen as a strategic move to unlock new funding opportunities while maintaining a long-term partnership with its parent company.