Intel's new CEO, Lip-Bu Tan, is reported to have had business ties with hundreds of Chinese firms, raising questions about a conflict of interest.
Intel's New CEO And His Ties With Chinese Firms Put Team Blue In a Great Spot To Increase Their Influence In China, But There Are Concerns
Well, Intel's former CEO Pat Gelsinger was succeeded by Lip-Bu Tan, an expert who previously managed Cadence Systems. While his arrival was seen as something optimistic for Team Blue, Reuters now reports that Lip-Bu Tan has significant investments in China, which include hundreds of domestic businesses, including eight of them linked to the People's Liberation Army. And it seems like the U.S. Department of Defense is raising questions about whether Tan is legally "qualified" to run Intel, since there is indeed a conflict of interest.
The report claims that Tan has authority over 40 Chinese companies and minority stakes in over 600 firms, which shows that he has a major influence over the local markets. It is said that with him taking over Intel, there's an apparent conflict of interest involved, given that Intel is the US's largest chipmaker and has defense and government contracts, which means that Tan's appointment is a matter of national security, one which the US cannot compromise.
The simple fact is that Mr. Tan is unqualified to serve as the head of any company competing against China, let alone one with actual intelligence and national security ramifications like Intel and its tremendous legacy connections to all areas of America’s intelligence and the defense ecosystem.
- Andrew King, Partner at Bastille Ventures
While it is claimed that Tan has exited from his business ventures in China, Reuters says that the Chinese database still shows the existence of his investments in the region and that his "divesting" records haven't surfaced. The majority of Intel's CEO investments are from his VC firm Walden International, and while it isn't illegal for US entities to invest in China unless the US Treasury bans the firms, it seems like Tan doesn't have involvement with such a company, so legally, he is in safe waters for now.
However, the key question here is whether Intel's defense contracts are in jeopardy, but that's something for the Trump administration to decide for now. On the other hand, Tan's experience in the Chinese markets gives Intel significant leverage over its competitors since he has taken companies to glory, including SMIC, where Tan was a seed investor. And given how Intel is not in the Chinese markets regarding AI hardware, Tan could sort this out, giving massive adoption to the Gaudi AI lineup.
