US Mulls Intel Stake Amid Trump's CEO Attack & China Ties Concerns
The United States government is reportedly exploring the unprecedented possibility of acquiring a financial stake in Intel, the struggling chip manufacturing giant. This consideration follows a recent meeting between President Donald Trump and Intel CEO Lip-Bu Tan at the White House, amidst a flurry of public scrutiny and political maneuvering surrounding the company.
The discussions come on the heels of Trump’s public demand last week for Tan’s immediate resignation. That call was seemingly prompted by a letter from Republican Senator Tom Cotton, who accused Tan of having “concerning” ties to the Chinese Communist Party. Cotton’s letter alleged that Tan controls “dozens of Chinese companies” and holds stakes in “hundreds of Chinese advanced-manufacturing and chip firms,” at least eight of which are reportedly linked to the Chinese People’s Liberation Army. The senator further highlighted that before joining Intel, Tan served as CEO of Cadence Design Systems, which recently pleaded guilty to illegally selling products and transferring technology to a Chinese military university without obtaining proper licenses—activities Cotton pointedly noted occurred during Tan’s tenure.
Cotton demanded answers from Intel by August 15, questioning how the company weighed Tan’s alleged Cadence conflicts of interest against its obligations to comply with U.S. national security laws, especially after receiving an $8 billion grant under the CHIPS Act, the largest allocation during the Biden administration. The senator also sought clarification on whether Tan was required to make any divestments to meet CHIPS Act requirements and if he had ever disclosed any ties to the Chinese government to U.S. authorities.
Tan, a Malaysian-born U.S. citizen for 40 years with a postgraduate degree from MIT, has publicly stated there is “a lot of misinformation” about his career and portfolio. An op-ed in the South China Morning Post suggested that Tan’s investments in China, which include stakes in sanctioned chipmaker SMIC and other companies on U.S. trade blacklists, are not unusual for prominent U.S. executives and firms with substantial interests in the region. The op-ed also noted reports suggesting that Cadence staff in China may have concealed illicit sales from the company’s U.S. headquarters, a detail Intel might offer in its response to Senator Cotton.
The backdrop to these high-level discussions is Intel’s precarious financial position. Once the undisputed leader in chip manufacturing, the company’s market value has plummeted from $288 billion in 2020 to $104 billion today. After experiencing its first unprofitable year since 1986 in 2024, longtime CEO Pat Gelsinger retired, leaving Tan to steer the company’s recovery. Industry insiders suggest Tan may pivot Intel’s strategy, potentially de-emphasizing Gelsinger’s manufacturing push to instead focus on a next-generation chipmaking process where Intel aims to gain an advantage over Taiwan’s TSMC, which currently dominates the industry and even supplies a third of Intel’s chips. This strategic shift, however, could lead to significant write-offs, potentially costing hundreds of millions or even billions of dollars, making a government financial injection a more attractive proposition.
This potential government stake in Intel is reminiscent of other unconventional interventions by the Trump administration in the tech sector, including past threats of tariffs against Apple and a recent deal with Nvidia and AMD that secured the U.S. a 15 percent share of their revenue from China chip sales. The proposed Intel deal also draws parallels to the Trump administration’s long-standing, yet unfinalized, efforts to force a sale of TikTok to address national security concerns.
The intense scrutiny on Intel, particularly as the largest recipient of CHIPS Act funding, is also viewed by some as a strategic attack on the Biden administration’s industrial policies. While both administrations have engaged in a tech rivalry with China, critics argue that Trump’s actions often appear politically motivated rather than solely driven by national security. For example, Representative Raja Krishnamoorthi (D-Ill.) recently expressed “concern” over Trump’s decision to allow Nvidia to resume exports of its H20 chips to China, warning that such policies risk accelerating Beijing’s AI capabilities and eroding the U.S. technological edge. Krishnamoorthi questioned the legal basis for extracting revenue sharing as a condition for export licenses and demanded transparency regarding congressional consultation on such agreements.
Meanwhile, social media users in Malaysia and Singapore have criticized Senator Cotton’s actions as a “usual case of racism,” drawing parallels to his previous accusations against Singaporean TikTok CEO Shou Zi Chew. Despite this backlash, Tan has not publicly criticized the Trump administration. Instead, he issued a statement emphasizing his U.S. patriotism: “I love this country and am profoundly grateful for the opportunities it has given me. I also love this company. Leading Intel at this critical moment is not just a job—it’s a privilege.” This appeal to shared values comes after Trump reportedly found Tan’s “amazing story” impressive following their recent White House meeting, suggesting that a deal could help Intel advance its planned $28 billion chip complex in Ohio, despite existing project delays that have pushed its operational timeline back by five years.