Shares of Intel dropped greater than 3% Thursday after President Donald Trump demanded the rapid resignation of the chipmaker’s CEO.
Claiming that there’s “no different resolution to this downside,” Trump stated Lip-Bu Tan is “extremely conflicted” in an early-morning submit on Reality Social. Although the president didn’t elaborate on his reasoning, Reuters has beforehand reported that Tan, both instantly or by means of enterprise funds, has invested at the very least $200 million in Chinese language manufacturing and chip firms.
Intel shares dropped as a lot as 3.5% earlier than recovering a few of these losses. Tan caught the ire of Trump sooner or later after Sen. Tom Cotton, a Republican from Arkansas, known as Tan’s ties to Chinese language companies “regarding” and questioned the potential impression on U.S. nationwide safety in a letter he despatched to Frank Yeary, Intel’s board chair.
In his letter, Cotton requested that Yeary reply by subsequent week to questions on Tan’s ties to Chinese language companies and his prior tenure as CEO of Cadence Design Techniques, which final month agreed to plead responsible in a previous felony case. He additionally cited Intel’s receipt of practically $8 billion in funding underneath the CHIPS and Science Act throughout Joe Biden’s presidency final yr.
“Intel is required to be a accountable steward of American taxpayer {dollars} and to adjust to relevant safety laws,” Cotton wrote. “Mr. Tan’s associations increase questions on Intel’s potential to satisfy these obligations.”
TAN AND TRUMP
Tan’s previous investments got here underneath scrutiny following his appointment as Intel’s CEO—though as a former enterprise capitalist, the scale and scope are maybe not so uncommon. A Reuters investigation discovered that Tan’s investments in China have been made by means of Walden Worldwide, the enterprise capital agency he based in 1987, together with two Hong Kong-based holding firms.
Reuters stated it discovered no proof that Tan was invested instantly in any firm that’s banned by the U.S. Treasury’s Chinese language Navy-Industrial Advanced Corporations Record.
What’s extra, Walden Worldwide wasn’t an anomaly: It was one among 5 American enterprise capital companies that have been the topic of a congressional investigation final yr into investments in China’s semiconductor business which have totaled $1 billion since 2001. The opposite funds on the listing have been GGV Capital, GSR Ventures, Qualcomm Ventures, and Sequoia Capital.
However Walden Worldwide—and Tan—could also be out of favor with the Trump administration for different causes. GGV Capital break up its U.S. and China operations into two companies final yr, whereas GSR Ventures did so this yr. Qualcomm donated $1 million to a nonprofit that supported Trump’s 2024 election bid, whereas Shaun Maguire, one among Sequoia’s companions, is a vocal Trump supporter and the agency has ties to David Sacks, the White Home AI and crypto czar.
As not too long ago as March, Tan stated the Trump administration was ready to assist Intel so the U.S. can preserve semiconductor management—and he would search the administration’s assist, as wanted. On Wednesday, Trump threatened a 100% tariff on imported semiconductors and chips, which might really favor Intel because it has home services.
Even when details about Tan’s investments is understood, it’s trickier to trace the non-public investments of CEOs in overseas firms, as they’re not required to reveal that data until there’s a possible battle of curiosity. However generally their investments do catch the attention of watchdogs.
Final yr, for instance, Marketing campaign for Accountability, a Washington, D.C.-based nonprofit that runs the Tech Transparency Venture, reported that former Google CEO Eric Schmidt had invested practically $17 million by means of his personal basis into the Chinese language AI business, whilst he was main the Nationwide Safety Fee on Synthetic Intelligence.
INTEL’S WOES
The Santa Clara, California-based firm issued a press release in response on Wednesday, saying: “Intel and Tan are deeply dedicated to the nationwide safety of the U.S. and the integrity of our function within the U.S. protection ecosystem.”
The corporate hasn’t responded to Trump’s name for Tan’s rapid resignation, in accordance with reporting by different information retailers.
Tan was appointed as CEO of Intel in March, changing Pat Gelsinger, who was compelled out in late 2024 after the board of administrators misplaced confidence in his turnaround plans for the corporate. In his first few months, Tan has already launched into an aggressive plan to streamline the group with a plan for extra layoffs, to the tune of about 15%.
In a July letter to workers about Intel’s second-quarter monetary outcomes, Tan stated such efforts are “steps in the precise course.”
REACTIONS TO TRUMP’S POST
On social media, a number of commenters questioned whether or not Intel will “bend the knee” and undergo Trump’s name for Tan’s resignation. Analysts additionally weighed in in regards to the implications of the president’s submit.
“Sadly, in contrast to different tech CEOs, Lip-Bu doesn’t seem to have cultivated the sort of private relationship with Trump that might assist to assuage his ire,” Bernstein analyst Stacy Rasgon stated in a observe to purchasers.
And Trump’s obvious meddling in company management could possibly be setting “a really unlucky precedent,” Phil Blancato, CEO of Ladenburg Thalmann Asset Administration (which doesn’t personal Intel shares) instructed Reuters. “You don’t need American presidents dictating who runs firms, however actually his opinion has advantage and weight.”
