Chip company Intel Corp. is shutting down Israeli cloud optimization solutions company Granulate, which it acquired in 2022 for $650 million. Granulate joins many other of Intel's Israeli acquisitions, which have been closed including Replay, Oplus and DSPC.
Dozens of the employees at Granulate today received dismissal notices as part of the major cuts being conducted by Intel in Israel and worldwide. Not all Granulate's employees are being let go at the moment with some remaining in the company's offices in the coming months to support the closure.
Granulate was acquired during the tenure of current CEO Pat Gelsinger as part of a strategy to offer cloud infrastructure products for enterprises. However, the strategy was abandoned in recent months due to the company's troubled financial situation as Intel decided to focus on developing its production activities to appeal to other chip companies, which is also encountering difficulties.
In hindsight it has become clear that the acquisition of Granulate was not right for Intel although it has benefitted founders Tal Saiag and Asaf Ezra and investors Insight Partners, Hetz, TLV Capital and Red Dot, who only invested $45 million in the company. The company was sold just several months before the tech crisis and the sharp fall in valuations of tech companies and layoffs that began in May 2022.
In recent years the managers of companies bought by Intel have preferred to sign acquisition deals that have grated them an independent status. Thus Mobileye CEO Prof. Amnon Shashua had insisted that the autonomous driving systems company would receive such autonomy and today Mobileye is a separate company not dependent on Intel's management. Avigdor Willenz made a similar demand for Habana Labs when the chip company was bought by Intel in 2019. Mobileye is not part of Intel's current round of layoffs but the founders of Habana Labs, which was integrated into Intel in recent months, are leaving the company. Granulate too was integrated into Intel.
Intel said, "As part of Intel's transformation process, we continue to actively review each part of our product portfolio to ensure alignment with our strategic goals and core business. After extensive consideration, we have made the difficult decision to discontinue the Intel Tiber App-Level Optimization product line. We are committed to ensuring a seamless transition for our customers, and we will continue to provide support until the first quarter of 2025."
Published by Globes, Israel business news - en.globes.co.il - on October 29, 2024.
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