Beijing/San Francisco — Lip-Bu Tan, the person chosen to guide Intel, the US’s largest chipmaker, has invested in a whole lot of Chinese language tech companies, together with at the very least eight with hyperlinks to the Folks’s Liberation Military (PLA), in line with a Reuters assessment of Chinese language and US company filings.
The appointment final month of Tan, one in every of Silicon Valley’s longest-running traders in Chinese language tech, as CEO of an organization that manufactures cutting-edge chips for the US division of defence raised questions amongst some traders concerning the extent of his ongoing involvement with companies in China.
Reuters’ assessment discovered that Tan controls greater than 40 Chinese language firms and funds in addition to minority stakes in over 600 through funding companies he manages or owns. In lots of situations, he shares minority stake possession with Chinese language authorities entities.
A number of traders expressed concern that the scope of Tan’s investments might complicate the duty of reviving Intel. With Taiwan Semiconductor Manufacturing Co and Samsung Electronics Co, Intel is one in every of three firms on the planet making essentially the most superior laptop chips, and the one one based mostly within the US.
“The straightforward truth is that Mr Tan is unqualified to function the pinnacle of any firm competing in opposition to China, not to mention one with precise intelligence and nationwide safety ramifications like Intel and its large legacy connections to all areas of America’s intelligence and the defence ecosystem,” mentioned Andrew King, a companion at enterprise capital agency Bastille Ventures. King mentioned neither he nor his fund have investments in Intel.
However some see Tan’s years of expertise investing in start-ups in China as key competencies to revive the flagging American icon.
“He was on the prime of my checklist and most investor’s lists of who they needed,” Bernstein analyst Stacey Rasgon mentioned. “He’s a legend and he’s been round ceaselessly.”
Tan made his investments by Walden Worldwide, the San Francisco enterprise capital agency he based in 1987, in addition to two Hong Kong-based holding firms: Sakarya and Seine Ltd. Tan was sole proprietor of Sakarya by October 31, in line with a Shanghai Inventory Trade submitting, and controls Seine by Walden, in line with Chinese language company databases, that are up to date each day.
Tan stays chair of Walden Worldwide.
Intel declined to touch upon Tan’s investments in China. A spokesperson mentioned Tan accomplished a director and officers questionnaire that requires disclosure of any potential conflicts of curiosity. “We deal with any potential conflicts appropriately and supply disclosures as required by SEC guidelines,” the spokesperson mentioned.
Walden didn’t return a request for remark. A supply conversant in the matter mentioned that Tan had divested from his positions in entities in China, with out offering additional particulars. Chinese language databases reviewed by Reuters checklist a lot of his investments as present, and Reuters was unable to ascertain the extent of his divestitures.
It isn’t unlawful for US residents to carry stakes in Chinese language firms, even these with ties to the Chinese language navy, until these firms have been added to the US treasury’s Chinese language Navy-Industrial Complicated Corporations Listing, which explicitly bans such investments.
Reuters discovered no proof that Tan is at the moment invested instantly in any firm on the US Treasury’s checklist.
The commerce division’s Entity Listing prohibits US companies from exporting managed applied sciences to firms however doesn’t bar investments in them. The Pentagon bans firms related to the Chinese language navy from the US navy provide chain.
Intel has a $3bn contract to make chips for the US division of defence and participates in two different defence division efforts that concentrate on creating cutting-edge chips.
The defence division didn’t touch upon Tan’s investments.
Reuters introduced its findings to the PLA by the Chinese language embassy in Washington, which had no touch upon the findings, however spokesperson Liu Pengyu mentioned: “We want to reiterate our agency opposition to the US generalising the idea of nationwide safety, distorting and smearing China’s military-civilian integration improvement coverage, and undermining regular China-US financial and commerce co-operation.”
Tan invested at the very least $200m in a whole lot of Chinese language superior manufacturing and chip companies between March 2012 and December 2024, together with in contractors and suppliers for the PLA, in line with a assessment of Chinese language company databases cross-referenced with US and analyst lists of firms with connections to the Chinese language navy.
Reuters recognized 20 funding funds and corporations during which Walden is a joint proprietor with Chinese language authorities funds or state-owned enterprises, in line with Chinese language company data. The federal government funds are largely from municipal governments of Chinese language tech hubs comparable to Hangzhou, Hefei, and Wuxi.
Walden has additionally invested in six Chinese language tech companies alongside main PLA provider China Electronics Company (CEC), which was sanctioned by President Donald Trump in 2020 as a part of an government order that banned buying or investing in “Chinese language navy firms”. CEC didn’t reply to a Reuters request for remark.
“On this political local weather, [China ties] can be one thing that accountable enterprise management at an organization like Intel would at the very least have a severe dialog about how you can attempt to handle,” mentioned Santa Clara legislation college professor Stephen Diamond. “It’s clearly politically delicate and the board would definitely wish to learn about it.”
Reuters sought remark from 11 out of 14 members of the Intel board who didn’t reply.
A few of Walden’s investments have been highlighted in a report revealed by the US Home choose committee on the Chinese language Communist Occasion in February 2024 that discovered the agency made at the very least six different investments totalling $161m in companies with hyperlinks to the Chinese language navy in 2001-22.
As one of many earliest Silicon Valley enterprise capitalists to put money into China, Lip-Bu Tan was a sought-after benefactor and mentor within the booming tech scene of the early 2000s.
Tan was a seed investor in Semiconductor Manufacturing Worldwide Corp (SMIC), China’s largest chip foundry, which is now beneath sanctions by the US authorities as a consequence of its shut ties to the Chinese language navy. Tan first invested in SMIC in 2001, a 12 months after it was based, and served on its board till 2018. The Home committee’s last report mentioned Walden exited SMIC in January 2021. SMIC didn’t reply to a request for remark.
The newest file of a divestment by Tan from a Chinese language entity that Reuters might establish was in January, when a Walden fund exited Ningbo Lub All-Semi Micro Electronics Gear Firm, which provides chips for Chinese language defence companies and analysis institutes, in line with Chinese language company knowledge. All-Semi didn’t reply to a request for remark.
Reuters
