Stock price of Intel plummets following Trump's call for CEO's resignation
Intel CEO's Investments Raise National Security Concerns
Lip-Bu Tan, the CEO of Intel since March 2023, has been at the centre of a controversy surrounding his extensive investments in Chinese technology companies. These investments, made through his venture capital firm Walden International and an associated Hong Kong entity, Seine Limited, have raised national security concerns in the U.S.
Between 2017 and 2020, Tan made at least 25 investments in Chinese chip companies, accounting for over 40% of Chinese semiconductor firms he backed. These investments include partial ownership in Semiconductor Manufacturing International Corporation (SMIC), China’s largest chipmaker, which has links to military applications.
Seine Limited, a Hong Kong-based entity controlled by Walden Technology Ventures LP, holds stakes in at least 68 Chinese companies. Notably, it owns 3.1% of Dapu Technologies, identified by the U.S. House Select Committee on the Chinese Communist Party as a PLA contractor, and 8.3% of HAI Robotics, alleged to have bid for PLA contracts and linked to Chinese surveillance firms.
Some companies backed by Tan's firm have been blacklisted by the U.S. Commerce Department due to human rights violations and military connections. These associations triggered a 2023 Congressional letter expressing “serious concerns” over Tan’s investments in firms related to China's military and surveillance apparatus.
Tan himself has defended these investments as focused on civilian technology innovation, with at least one company (HAI Robotics) denying military contract bids and asserting compliance with U.S., Chinese, and European regulations.
The dual role of Tan as Intel CEO and a major investor in Chinese companies linked to the CCP and PLA has raised alarm among U.S. policymakers. This led to a direct White House involvement, including an unprecedented call for his resignation—later retracted after meetings.
His longstanding China ties complicate Intel’s strategic maneuvers, especially as the company navigates sensitive sectors and heavily depends on U.S. government support, such as funding from the CHIPS Act to boost domestic manufacturing.
Critics worry that Tan’s investments could pose conflicts of interest and raise risks relating to technology transfer and inadvertent strengthening of Chinese military-industrial capabilities through venture funding channels. Intel’s board reportedly has internal divisions over the company's strategic direction under Tan, possibly influenced by these geopolitical and security controversies.
Intel has stated that they are deeply committed to advancing U.S. national and economic security interests. The company had been a beneficiary of the Biden administration's CHIPS Act, receiving more than $8 billion in federal funding to build computer chip plants around the country. However, Intel's troubles have been magnified since the advent of artificial intelligence, where the chips made by once-smaller rival Nvidia have become tech's hottest commodity.
As Intel sheds thousands of workers and cuts expenses, including some domestic semiconductor manufacturing capabilities, the national security concerns surrounding Tan's investments remain a significant issue. Sen. Tom Cotton expressed these concerns in a letter to Intel Chairman Frank Yeary, urging the company to address the potential risks posed by Tan's investments.
References:
- Bloomberg
- Reuters
- The Washington Post
- The New York Times
- The government's concerns about Lip-Bu Tan, Intel CEO, have intensified due to his significant investments in Chinese businesses, particularly in the technology sector.
- The technology companies Tan invested in, such as SMIC and Dapu Technologies, have been alleged to have links with the Chinese military and surveillance firms.
- Seattle-based tech giant Microsoft, along with other businesses and the U.S. finance industry, is closely watching Intel's strategic decisions, given Tan's extensive investments in Chinese firms.
- As Intel navigates the competitive landscape of the semiconductor industry, particularly with Nvidia in artificial intelligence development, the controversies surrounding Tan's investments were found to have a significant impact on the company's strategic direction.
- National security concerns continue to follow Intel, as the company deals with the fallout of layoffs and cost-cutting measures, including the reduction of domestic semiconductor manufacturing capabilities. Senator Tom Cotton has urged Intel's chairman to address the potential risks associated with Tan's investments.
