Intel has had a hard time weathering the many storms faced by the chips industry in recent months. A chip supply gluts, internal cost cutting measures and stiff competition from other semiconductor giants have meant an uphill battle for the Santa Clara, Calif.-based company as it attempts to renew itself as a front-runner in the chip-making race.

We didnt get into this mud hole because everything was going great, Intel CEO Pat Gelsinger told the Wall Street Journal. We had some serious issues in terms of leadership, people, methodology, et cetera that we needed to attack.

A confluence of factors may have caused Intels setback. In recent years, companies that were smaller than Intel by market capitalization have gained more ground in semiconductor manufacturing. Intel has also struggled to attract business as a foundry that manufactures chips designed by other companies, the Journal reported.

Intels tumultuous era has hurt its businessthe tech company reported its largest quarterly loss in history in the first three months of 2023 with revenue down 36% and a 133% dip in earnings per share compared to the same period last year. Its expectations for the second quarter fell short of analyst expectations, too. The company also kicked off cost-cutting measures including trimming the pay of Gelsinger and other executives.  

Intel did not immediately return Fortunes request for comment.

A.I. boom

Even though troubles at Intel have continued over several years, its performance is especially striking at a time when its other chip-making peers have cashed in on the artificial intelligence and spending boom thats driving demand in the industry. 

Nvidia, the graphics-chip maker also based in Santa Clara, briefly hit a valuation of $1 trillion this week, boosted by the interest in A.I. and its launch of new partnerships. It also forecasted profits for the current quarter to be at least 50% higher than Wall Street expectations, reflecting optimism in its growth in the next few months. Other big playersincluding Taiwan Semiconductor Manufacturing Company and Samsunghave also cemented their position as leaders in advanced chip-making over time. 

But the competition are not stopping Intel from dreaming big about its future.  

Is TSMC going to keep growing between now and the end of the decade? Gelsinger said. Yes. Will Samsung grow? Yes. Will Intel grow? I hope a lot faster than either of those two.

As the chip market grows rapidly, Gelsinger says that Intel becoming a leader in its own right is not optional, according to the Journal.

Intel is aiming to climb to the No. 2 spot in the semiconductor industrystanding just behind TSMC, whose market value is over four times that of Intels presently. And to be sure, even though other players have secured their lead, the chip-making space is still facing challenges owing to excess inventories and a demand slump in contrast to COVID-19 times. For instance, Samsungs profits dropped 95%, impacted by slow chip demand in the first quarter of 2023. 

If you dont have a little bit of boldness, you shouldnt be in the semi industry, Gelsinger said. 

Intels rocky ride

Some of Intels recent issues can be traced back to the pandemic, when chips were in short-supply due to the boom in demand for personal gadgets. But it faced other major setbacks along the way, like losing its chips contract with Apple and a delay in the launch of one of its new chips.  

When Gelsinger took office in 2021, he faced the mountainous task of turning the companys chip-making business around. And to do so, his plan involved Intel focussing on manufacturing chips that were designed by other customersa departure from decades of using its factories solely to make its own chips. The decision was initially met with excitement from investors, but that soon changed into skepticism.

The investors are negative and everybody is cheering us on, Gelsinger told analyst Ben Thompson last February. Put your freaking money where your mouth is if youre going to say it. 

As the company embarks on what is a multiyear journey, according to Gelsinger, to reclaim a leading role among rivals, Intel has to still face the demand-supply mismatch in semiconductors. Geopolitical tensions between the U.S. and China is another consideration as the chips industry is in the firing line of new export curbs, but Intel continues to see the region as key to its business.

The three so-called godfathers of A.I. arent thrilled with how the technology is evolving.

The trio of computer scientistsProfessor Yoshua Bengio, Dr Geoffrey Hinton, and Yann LeCunearned the nickname in 2019 when they won the prestigious Turing Prize and were awarded $1 million to share between them.

Now the group, who have reportedly been friends for more than three decades, have turned their attention not to furthering the course of artificial intelligence but to warning the industry that now is the time to put the breaks on.

In an interview with the BBC, Bengio said watching A.I. morph into an apparent threat has left him questioning his lifes work, and that his direction and identity is no longer clear to him.

It is challenging, emotionally speaking, for people who are inside [the A.I. sector], he said. You could say I feel lost. But you have to keep going and you have to engage, discuss, encourage others to think with you.

Bengio is one of many who is warning about the impact A.I. could have if it fell into the hands of military bodies, and is also the first signatory on an open letter also signed by the like of Tesla CEO Elon Musk and Apple co-founder Steve Wozniak, calling for a six-month pause on the development of the technology.

Second letter

Bengio, formerly an advisor to Microsoft and a collaborator with IBM, also signed a second letter this week suggesting that mitigating the risk of extinction from A.I. should be a global priority alongside other societal-scale risks such as pandemics and nuclear war.

Alongside Bengios name is OpenAIs Sam Altman, who has openly called for increased regulation of the sector, as well as fellow godfather Hinton.

Bengio believes companies working on powerful tools like ChatGPTa large language modelshould be registered: Governments need to track what theyre doing, they need to be able to audit them, and thats just the minimum thing we do for any other sector like building airplanes or cars or pharmaceuticals.

We also need the people who are close to these systems to have a kind of certificationwe need ethical training here. Computer scientists dont usually get that, by the way.

Currently a professor at the Université de Montréal, Bengio adds that its not too late to set the sector on the right path.

Its never too late to improve, he said. Its exactly like climate change. Weve put a lot of carbon in the atmosphere. And it would be better if we hadnt, but lets see what we can do now.

What the other godfathers think

Hinton is similarly nervous about the path A.I. is taking, saying he fears the technology will outstrip the intelligence of humans.

Previously a Google staffer, the award-winning computer scientist told the MIT Technology Review: I have suddenly switched my views on whether these things are going to be more intelligent than us. I think theyre very close to it now and they will be much more intelligent than us in the future How do we survive that?

The A.I. expert has similarly warned of the impact should the technology fall into the wrong hands.

It is hard to see how you can prevent the bad actors from using it for bad things, Hinton told the New York Times in an interview published in May. I console myself with the normal excuse: If I hadnt done it, somebody else would have.

The third member of the groupMeta Researchs chief A.I. scientistLeCun is far less worried about the negative impact of the technology.

LeCun has resoundingly rejected calls to delay A.I., telling a YouTube stream hosted by DeepLearningAI: Why slow down the progress of knowledge and science? Then there is the question of products. Im all for regulating products that get in the hands of people, I dont see the point of regulating research and development.

I dont think it serves any purpose other than reducing the knowledge that we could use to actually make technology better and safer.

LeCuns bullish position doesnt seem to have changed from four years ago, when he co-wrote a piece in Scientific American saying humans dramatically overestimate the threat of an accidental A.I. takeover.

He added: We tend to conflate intelligence with the drive to achieve dominance. This confusion is understandable: during our evolutionary history as (often violent) primates, intelligence was key to social dominance and enabled our reproductive success.

And indeed, intelligence is a powerful adaptation, like horns, sharp claws or the ability to fly, which can facilitate survival in many ways. But intelligence per se does not generate the drive for domination, any more than horns do.

JPMorgans CEO is brushing off fears of a break-up between the U.S. and Chinese economies. 

While Jamie Dimon predicted that over time therell be less trade between the U.S. and China, it wont be a decoupling and the world will go on, in an interview with Bloomberg aired Wednesday.

Dimon is currently in Shanghai for a series of JPMorgan conferences for his first visit to mainland China since the COVID pandemic. The JPMorgan CEO praised the ability to travel to the country in-person, saying humanity is better off with this type of thing.

Disagreements over issues like Taiwan and the export of sensitive technology to China are straining U.S.-China relations. In May, the heads of the G7 countries said they would pursue de-risking instead of decoupling or turning inwards when it came to China. (China argues the term just continues an alleged strategy from the U.S. and others to constrain the country.)

While JPMorgans CEO brushed off suggestions that he could act as a de facto diplomat, he called himself an American patriot and a red-blooded, full-throated, free enterprise capitalist.

Still, Dimon said he had enormous respect for the Chinese people, and credited the countrys extraordinary development. When we do business in a country like China, he said, were there hopefully through good times and bad times. 

Chinese officials say they want to attract foreign business to revive the countrys sluggish economy after years of COVID-zero. Yet a series of regulatory crackdowns, including a recent campaign against consulting firms and data providers, could unnerve foreign companies considering a return to China.

Earlier this year, Chinese regulators gave JPMorgan permission to take full ownership of its China mutual fund, following earlier approvals of a fully-owned securities company and futures company. Dimon at the time said the bank would bring its full force to the market. 

Still, in a separate interview on Wednesday, Mark Leung, JPMorgans China CEO, admitted that the banks expansion in the country will be a longer journey than we would wish to gradually build up scale and reputation to do business.

CEO visits

Dimon is one of a handful of CEOs that have traveled to China since the country ended its COVID-zero policy last December. 

Other CEOs to have recently traveled to China include Apples Tim Cook, Intels Pat Gelsinger, and Qualcomms Cristiano Amon. 

Tesla CEO Elon Musk is also in China this week, landing in Beijing on Tuesday. Musk met senior Chinese officials, including foreign minister Qin Gang. A government release said that Musk opposed decoupling between the U.S. and China, and that the carmaker wants to expand its China business. 

Musk recently suggested in an interview in mid-May that there was a certain inevitability to the situation over Taiwan, and that the Chinese and global economies were like conjoined twins.

Theres no doubt about it: Things arent looking so great for commercial real estate, especially for office space.

Look no further than a revised forecast issued earlier this month by a group of researchers from New York University and Columbia University, which predicts that office values in New York City alone will plummet a staggering 44% by 2029. Thats much steeper than the groups prior predictionissued a year agofor NYC office values to fall 28% by 2029.

The stickiness of remote work, coupled with interest rates spiking just as many commercial real estate loans come due, is the underlying source of the commercial real estate bearishness. However, at least in the eyes of Tesla CEO Elon Musk, property declines will soon spread beyond commercial real estate.

On Monday, Musk insinuated that pain awaits the residential housing market when he tweeted that Commercial real estate is melting down fast. Home values next.

Musk didnt say how much he thinks U.S. home prices will fallnor did he explain why. He also got some push back.

On Tuesday, Redfin CEO Glenn Kelman shot back at Musk, tweeting, But the loss in demand for commercial real estate is whats driving demand for residential real estate. People who work from home need more space at home. Sales volume is down because inventory is down. Today, home prices increased for a second straight month.

The idea that remote work has boosted home prices during the pandemic is supported by research published last year by researchers at the Federal Reserve Bank of San Francisco. The San Francisco Fed paper argues that upwards of 50% of Pandemic Housing Boom gains through November 2021 can be attributed to an elevated demand for space created by the pandemics remote work shift.

Our results suggest that rising house prices over the pandemic reflected a change in fundamentals rather than a speculative bubble. This implies that the evolution of remote work may be an important determinant of future housing costs and inflation, wrote the team of San Francisco Fed researchers.

So who is right, Kelman or Musk? The industry is fairly divided.

While national home prices have fallen a bitdown 2.2% from June 2022 according to the seasonally adjusted Case-Shiller National Home Price Indexthey aren't crashing broadly. Some markets like San Francisco (down 12.9% from its 2022 peak), Phoenix (down 8.4%), and Las Vegas (down 9.0%) have fallen sharply. However, many places in the Midwest, like Chicago, and along the East Coast, like Miami, are still near all-time highs.

Economists at firms like Zillow and CoreLogic argue that national home prices have bottomed, while firms like Moody's Analytics and Fannie Mae think that national home priceswhich rose on a month-over-month basis in February and March according to Case-Shillerwill soon flip back into correction.

Want more housing data? Follow me on Twitter at @NewsLambert.

Hard-fought to the end, the debt ceiling and budget cuts package is heading toward a crucial U.S. House vote as President Joe Biden and Speaker Kevin McCarthy assemble a coalition of centrist Democrats and Republicans to push it to passage over fierce blowback from conservatives and some progressive dissent.

Biden is sending top White House officials to meet early Wednesday at the Capitol to shore up support ahead of voting. McCarthy is working furiously to sell skeptical fellow Republicans, even fending off challenges to his leadership, in the rush to avert a potentially disastrous U.S. default.

Despite deep disappointment from right-flank Republicans that the compromise falls short of the spending cuts they demanded, McCarthy insisted he would have the votes needed to ensure approval.

Were going to pass the bill, McCarthy said as he exited a lengthy late Tuesday night meeting at the Capitol.

Quick approval by the House and later in the week the Senate would ensure government checks will continue to go out to Social Security recipients, veterans and others, and prevent financial upheaval at home and abroad. Next Monday is when Treasury has said the U.S. would run short of money to pay its debts, risking an economically dangerous default.

The package leaves few lawmakers fully satisfied, but Biden and McCarthy are counting on pulling majority support from the political center, a rarity in divided Washington, testing the leadership of the president and the Republican speaker.

Overall, the 99-page bill restricts spending for the next two years, suspends the debt ceiling into January 2025 and changes policies, including new work requirements for older Americans receiving food aid and greenlighting a controversial Appalachian natural gas line that many Democrats oppose.

For more than two hours late Tuesday as aides wheeled in pizza at the Capitol, McCarthy walked Republicans through the details, fielded questions and encouraged them not to lose sight of the bills budget savings.

The speaker faced a sometimes tough crowd. Leaders of the hard-right House Freedom Caucus spent the day lambasting the compromise as falling well short of the spending cuts they demand, and they vowed to try to halt passage by Congress.

This deal fails, fails completely, Rep. Scott Perry, R-Pa., the chairman of the Freedom Caucus, said earlier in the day, flanked by others outside the Capitol. We will do everything in our power to stop it.

A much larger conservative faction, the Republican Study Committee, declined to take a position. Even rank-and-file centrist conservatives were not sure, leaving McCarthy desperately hunting for votes.

Rep. Nancy Mace, R-S.C., said after the healthy debate late into the night she was still a no.

Ominously, the conservatives warned of potentially trying to oust McCarthy over the compromise.

Theres going to be a reckoning, said Rep. Chip Roy of Texas.

Biden was speaking directly to lawmakers, making more than 100 one-on-one calls, the White House said.

The nonpartisan Congressional Budget Office said the spending restrictions in the package would reduce deficits by $1.5 trillion over the decade, a top goal for the Republicans trying to curb the debt load.

McCarthy told lawmakers that number was higher if the two-year spending caps were extended, which is no guarantee.

But in a surprise that could further erode Republican support, the GOPs drive to impose work requirements on older Americans receiving food stamps ends up boosting spending by $2.1 billion over the time period. Thats because the final deal exempted veterans and homeless people, expanding the food stamp rolls by some 78,000 people monthly, the CBO said.

House Democratic leader Hakeem Jeffries said it was up to McCarthy to turn out votes from some two-thirds of the Republican majority, a high bar the speaker may not be able to reach. Some 218 votes are needed for passage in the 435-member House.

Still, Jeffries said the Democrats would do their part to avoid failure.

It is my expectation that House Republicans would keep their promise and deliver at least 150 votes as it relates to an agreement that they themselves negotiated, Jeffries said. Democrats will make sure that the country does not default.

Liberal Democrats decried the new work requirements for older Americans, those 50-54, in the food aid program. And some Democratic lawmakers were leading an effort to remove the surprise provision for the Mountain Valley Pipeline natural gas project. The energy development is important to Sen. Joe Manchin, D-W.Va., but many others oppose it as unhelpful in fighting climate change.

The top Democrat on the House Natural Resources Committee, Rep. Raul Grijalva of Arizona, said including the pipeline provision was disturbing and profoundly disappointing.

Rep. Pramila Jayapal, D-Wash., chair of the Congressional Progressive Caucus, had this warning for McCarthy: He got us here, and its on him to deliver the votes.

Wall Street was taking a wait-and-see approach. Stock prices were mixed in Tuesdays trading. U.S. markets had been closed when the deal was struck over the weekend.

The House aims to hold procedural votes Wednesday afternoon with final action expected in the evening. It would then send the bill to the Senate, where Democratic Majority Leader Chuck Schumer and Senate Republican leader McConnell are working for passage by weeks end.

Schumer called the bill a sensible compromise. McConnell said McCarthy deserves our thanks.

Senators, who have remained largely on the sidelines during much of the negotiations between the president and the House speaker, began inserting themselves more forcefully into the debate.

Some senators are insisting on amendments to reshape the package from both the left and right flanks. But making any changes to the package at this stage seemed unlikely with so little time to spare before Mondays deadline.

Holmes, 39, was convicted of fraud last year for duping investors who contributed hundreds of millions of dollars in the failed Silicon Valley startup.

Holmes and Ramesh Sunny Balwani, Holmes former partner and fellow executive who is currently serving a nearly 13-year prison sentence, said Theranos had developed a device that could quickly scan for diseases and other medical conditions with a just few drops of blood. But the technology never worked as advertised leading to the meteoric downfall of a company that once promised to revolutionize health care.

On Tuesday, Holmes entered a federal womens prison camp in Bryan, Texas a minimum-security facility where the federal judge who sentenced Holmes in November recommended she be incarcerated.

Here are some things to know about Federal Prison Camp Bryan and Holmes arrival at the facility.

Why is Holmes being incarcerated in Bryan now?

Holmes reported to FPC Bryan on Tuesday, the Federal Bureau of Prisons confirmed. The arrival comes more than a year after a jury convicted Holmes on four felony counts of fraud and conspiracy in January 2022. She was sentenced to 11 years in November.

Holmes had originally been ordered to begin her prison sentence on April 27, but won a reprieve with a last-minute legal maneuver that gave her more time with her two young children. Earlier this month, U.S. District Judge Edward Davila set Holmes revised prison-reporting date for May 30.

In a separate ruling, Davila also ordered that Holmes and Balwani pay a $452 million in restitution.

Attorneys representing Holmes did not immediately respond when contacted by The Associated Press for statement on Tuesday.

Where is Federal Prison Camp Bryan?

FPC Bryan is located about 95 miles (150 kilometers) northwest of Houston. The facility encompasses about 37 acres (15 hectares) of land.

According to the Federal Bureau of Prisons, FPC Bryan is one of a handful of minimum security facilities of its kind across the nation.

Who else is held in FPC Bryan?

About 650 women are housed in FPC Bryan including Real Housewives of Salt Lake City star Jennifer Shah, who was sentenced earlier this year to 6 1/2 years in prison for defrauding thousands of people in a yearslong telemarketing scam.

In addition to Shah, other recognizable figures who have served sentences at FPC Bryan in the past include former Enron executive Lea Fastow, participant in the Jan. 6 Capitol attack Jenna Ryan, and Michelle Janavs, heir to the Hot Pockets fortune and a former investment executive who participated in the college admissions scandal, according to The New York Times.

What is a minimum-security prison like?

Federal prison camps like FPC Bryan are minimum-security institutions. Most of those types of facilities dont even have fences and hold inmates the Bureau of Prisons considers to be the lowest security risk.

The prison camps also often have minimal staffing and many of the people incarcerated there work at prison jobs. According to a 2016 FPC Bryan inmate handbook, those in the Texas facility who are eligible to work can earn between 12 cents and $1.15 per hour in their job assignments, which include food service roles and factory employment operated by Federal Prison Industries.

Federal prison camps were originally designed with low security to make operations easier and to allow inmates tasked with performing work at the prison to avoid repeatedly checking in and out of a main prison facility. But the lax security opened a gateway for contraband, such as drugs, cellphones and weapons. The limited security has also led to a number of escapes from prison camps.

Everyone loves a long weekend. But this Memorial Day weekend was different from the last few years. The Friday leading up to it marked a new travel record in the post-pandemic era, as more people ventured out despite stubborn inflation and high airfares. 

The Transportation Security Administration, which clocks passenger numbers at U.S. airports, screened a total of 2.74 million people on Friday alonethe highest since the 2019 Thanksgiving weekend. And from Friday through Monday, the TSA screened 9.79 million peopleup by 300,000 from the same holiday period in 2019. The data points to the strong return of travel activity following years of depressed or slowly recovering demand due to COVID-19-related restrictions. 

Industry groups anticipated this years Memorial Day holiday to shatter records as people booked trips in advance. The demand was also not restricted to domestic locations, with foreign destinations like Rome, Paris and London among the top cities.

The American Automobile Association projected earlier this year that 42.3 million Americans would travel at least 50 miles from home during this years Memorial Day Weekend, which would make it the third busiest since the organization started tracking data in 2000. We are seeing a demand for iconic cities, international vacation packages, and cruises with included amenities that provide more value for the price, said Paula Twidale, senior vice president of AAA Travel.

Its not just domestic travel: Bookings for international trips were up 250% during the Memorial Day weekend, compared to 2022, AAA noted. The deluge in bookings comes despite high prices, particularly soaring airfare for international flights. Ticket prices for international travel are the highest theyve been in over five years, says mobile travel application Hopper. For instance, the average ticket price for last minute flights to Europe during the Memorial Day weekend was $1,300, up 50% from 2022 and 40% from 2019. Ticket fares to Asia were up 70% compared to pre-pandemic times, Hopper noted. 

Litmus test

The strong appetite for travel will serve as a litmus test for what airline companies can expect as they grapple with pilot shortages and introduce revamped flight schedules.  

This summer travel season could be one for the record books, especially at airports, Twidale said in AAAs report.  

A notable shift with travelers this year is that many of them are making impromptu plans closer to the actual travel date, for domestic and international trips, according to Hoppers lead economist, Hayley Berg. 

Today, travelers are starting the travel planning process nearly 1.5 weeks closer to their departure dates for domestic trips, about a 30% reduction in travel planning time compared to pre-pandemic, Berg wrote in April, adding that Gen Z and millennial travelers were an important segment contributing to this trend. As summer holidays approach, this could translate into an uptick in booking closer to the travel date, affecting the availability of flight seats.  

Are airlines ready for the summer?

Airlines have been on edge following cancellations, challenging weather conditions and a staffing shortage that took center-stage in 2022. Travel last summer was characterized by high pricesin some cases, higher than this yearand mass delays or cancellations, leaving travelers frustrated.

But in 2023, airlines are determined to have a hiccup-free travel season. Major carriers expect a bumper summer season and are preparing for the surge in travelers by adding more flights and new destinations.

Delta Air Lines reported a record number of advance bookings for the summer, CEO Ed Bastian said during the companys earnings call last month. To meet the demand for travel, Bastian said Delta would increase flight capacity by 17% compared to last year, during the peak summer months. 

I think we feel really confident in the summer and what we have on the books and what were seeing real time in terms of demand, Delta president Glen Hauenstein said during the companys first quarter earnings call. 

Other major players, including United Airlines, shared the same optimism for the demand in the months to come. 

Demand is really good, bookings are strong, its going to be a busy summer, United CEO Scott Kirby told CNBC last week. 

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