Data Sheet—Big Questions Remain for Intel After CEO Upheaval

The most immediate, perhaps, is whether we have the full story on the 58-year-old executive’s behavior that forced him to resign. Intel said Krzanich violated the company’s strict non-fraternization policy in “a past consensual relationship.” But the company also said the investigation is ongoing.

A more pressing question is who becomes the next CEO of Intel (interim CEO and former CFO Bob Swan is saying he won’t be in the running). Though no one would confuse the average height Krzanich with 6-foot, 5-inch Patriots quarterback Tom Brady in an elevator, both seem to have a penchant for driving away possible successors. We may never know all the details about why so many well-regarded and longtime Intel execs left on Krzanich’s watch but the list includes Stacy Smith, Diane Bryant, Renee James, Kim Stevenson, and Kirk Skaugen. Some, like Bryant who is overseeing much of Google’s cloud business, landed quite well—like Brady’s former understudy Jimmy Garoppolo, who is now in the Bay Area as star quarterback for the 49ers. Still, one or more of the Intel departees could be considered in the search that Intel’s board says will look at internal and external candidates. Also keep an eye on Murthy Renduchintala, the savvy engineer and manager Krzanich recruited from rival Qualcomm in 2015, who is now Intel’s group president running many key areas.

But after you’ve answered the immediate question and the most pressing question, you come, of course, to the most important question. After Krzanich’s five-year tenure, is Intel poised to thrive or dive in the next decade of tech evolution? The evidence is mixed.

Krzanich certainly did little to get Intel back in the game for mobile CPUs, though he did win half of Apple’s wireless modem business. Something also seems severely amiss in Intel’s manufacturing advancement, as rivals have drawn even and possibly surpassed its chipmaking prowess, fueling the competitive threat of Advanced Micro Devices. Apple may be about to fly the coop and build its own Mac CPUs, too.

Will Intel be a major player in the coming wave of VR gear sales? Seems unlikely. The huge acquisitions of Altera and Mobileye cost shareholders $32 billion, but it’s too soon to know if they will make Intel a leader for AI chips and self-driving car silicon, respectively (or even if placing big bets on those incipient markets as future winners was correct). And while Intel’s server chips are winning a lot of cloud data center orders right now, Krzanich may have been late to recognize the growing threat from graphics chip maker Nvidia.

So even as he departs his corner cubicle at Intel’s Santa Clara HQ, it’s too soon to close the book on Brian Krzanich. I’ll have to get back to you in about five years.

(Update: This story was updated on June 22 to correct that Doug Davis has not left the company.)

NEWSWORTHY

Nothing is certain except. I could have just as easily written today's essay about the fascinating and controversial 5-4 Supreme Court decision (full PDF version) issued on Thursday about e-commerce. The close decision overturned a landmark 1992 case and found that a state may require Internet retailers to collect sales tax even if the retailers don't have a physical presence in the state. “Rejecting the physical presence rule is necessary to ensure that artificial competitive advantages are not created by this court’s precedents,” Justice Anthony Kennedy wrote. Shares of online retailers fell, though some more than others, as some (like Amazon) have already been collecting taxes voluntarily. Amazon and Etsy fell 1%, Wayfair lost 2%, eBay 3%, and Overstock.com 7%. Seattle-based Avalara, which makes software to help companies collect sales taxes, couldn't have chosen a better time to go public. After debuting last week at $24, it hit $59 on Thursday before closing at $51.04.

Closed door grilling. The annual meeting of the National Association of Attorneys General on Thursday got an unpublicized visit from Facebook COO Sheryl Sandberg, Bloomberg reports. Speaking at a private session, Sandberg answered questions about the Cambridge Analytica data sharing scandal. Meanwhile, the world's largest social network said it had expanded a fact-checking effort involving third-party publishers to 14 countries.

A special deal just for you. In what could be the start of a whole new revenue stream for video makers, YouTube on Thursday introduced a per-channel subscription option for $5 a month. Fans of a particular channel who subscribe would get access to members-only benefits like extra videos, livestream events, or unique badges and emojis. Blog publishing software developer WordPress is also looking to help creators. It bought publishing company Atavist on Thursday to acquire its suite of subscription and fee-collecting features.

Fill out this form. Free stock and digital currency trading app Robinhood is talking to federal regulators to add banking services like savings accounts, Bloomberg reports. The new features would likely come through a partnership with an existing bank, rather than Robinhood obtaining a banking license on its own. Also looking to add features in the fintech space, PayPal announced it paid $120 million for fraud prevention software firm Simility.

Not quite jumping the shark. The electric scooter craze that has overwhelmed San Francisco is coming to Europe. Startup Lime says it will launch its motorized rental rides in Paris this week as the opening salvo in a European invasion. Rivals Bird and Jump, owned by Uber, are expected to follow soon.

FOR YOUR WEEKEND READING PLEASURE

A few longer reads that I came across this week that may be appealing for your weekend reading pleasure:

The Pipeline (California Sunday Magazine)
When people talk about tech’s lack of diversity, they often talk about the pipeline problem: the idea that there aren’t enough qualified women and people of color to hire, which is why the industry is so homogeneous. But to some, the so-called pipeline problem is an excuse. Tech companies, they believe, simply aren’t trying hard enough. To better understand the contours of this debate, we talked to teachers, first-time startup founders, recruiters, engineers, venture capitalists, diversity and inclusion consultants, aspiring coders, and programmers who can’t wait to quit.

Finally, a Problem That Only Quantum Computers Will Ever Be Able to Solve (Quanta Magazine)
Computer scientists have been searching for years for a type of problem that a quantum computer can solve but that any possible future classical computer cannot. Now they’ve found one.

Surfers vs. Skateboarders: The Fight for the Soul of California (Wall Street Journal)
Things got gnarly last month when a group of wetsuit-loving California lawmakers voted on a bill in the state assembly to make surfing the official state sport. State Assemblyman Al Muratsuchi, a coastal Democrat from Los Angeles County, and a “proud member of the assembly surf caucus,” said he was “stoked” he had introduced the measure...Some Californians are riding for a different sport as the ultimate emblem of the California lifestyle: skateboarding.

The Legend of Nintendo (Bloomberg Businessweek)
For anyone who’s ever marveled at Nintendo’s vivid, phantasmagoric, zoologically ornate video games, visiting the company’s understated home in Kyoto, Japan, can be disorienting at first. That such an outpouring of kaleidoscopic products comes from a place so devoid of color can be momentarily hard to fathom. The headquarters are housed in a stark white cubical building surrounded on the perimeter by a sturdy white wall. The lobby is minimally decorated. The sidewalls are sheathed in cool white marble. No Donkey Kong posters. No Mario cutouts. No Pikachu plush toys. The rare sprinkling of color comes from a series of small, framed art pieces: a serene procession of birds and flowers.

FOOD FOR THOUGHT

Can it be less than three years ago that The New Yorker declared "The End of Twitter." Whether it was the subsequent 2016 election victory of President Donald Trump, a series of new features from the company itself, or some other factors, there's little doubt that Twitter is back. Usership is growing again and the stock has nearly tripled over the past year. BuzzFeed's Alex Kantrowitz digs into the recovery and concludes that, well, a variety of factors contributed to the revival. Focusing on breaking news helped:

It’s hard to overstate the importance of Twitter’s decision to tie its identity to news. For years, you could ask Twitter, “What exactly are you?” and not get a straight answer, because Twitter itself didn’t really know. The abundance of communities that formed on the service—Sports, Black, Weird, Meme, Celebrity Twitter, and so on—made it difficult to pin down. And Twitter couldn’t settle on one thing it did really well. But in April 2016, Twitter made that call. It moved itself from the “Social Networking” section of the iOS App Store to “News,” ceding the former to Facebook and its satellite apps.

As soon as Twitter decided it was a news app, it began investing in its core strengths. It prominently streamed local news broadcasts, it promoted news stories in the timeline, it sent more traffic to publishers. And it cut distracting side projects, some of which it had spent hundreds of millions of dollars to acquire, including Fabric, TellApart, and Vine.

IN CASE YOU MISSED IT

What Happened to Apple's AirPower Wireless Charger? By Don Reisinger

Why Ripple Thinks Coinbase Should Add Cryptocurrency XRP By Jen Wieczner

Commentary: Three Reasons Trump’s New Space Force Would Be a Disaster By Bryan Nakayama

23andMe Offers DNA Help for Families Separated at U.S. Border By Glenn Fleishman

Goldman Sachs Leads $40 Million Investment in Anti-Phishing Firm Agari By Jeff John Roberts

Here's How NASA Plans to Protect Earth From Giant Asteroids Hurtling Through Space By John Patrick Pullen

BEFORE YOU GO

An unusual obituary worth noting today: Koko the gorilla died at age 46. The sweet-tempered beast came to fame for learning to communicate using sign language, raising a kitten and palling around with celebrities like Robin Williams and Leonardo DiCaprio. She died in her sleep on Tuesday. Rest in peace.

This edition of Data Sheet was curated by Aaron Pressman. Find past issues, and sign up for other Fortune newsletters.