By Eduardo Baptista, Stephen Nellis and Max A. Cherney
BEIJING/SAN FRANCISCO (Reuters) – Lip-Bu Tan, the man chosen to lead Intel, the U.S.’s largest chip maker, has invested in hundreds of Chinese tech firms, including at least eight with links to the People’s Liberation Army, according to a Reuters review of Chinese and U.S. corporate filings.
The appointment last month of Tan, one of Silicon Valley’s longest-running investors in Chinese tech, as CEO of a company that manufactures cutting-edge chips for the U.S. Department of Defense raised questions among some investors about the extent of his ongoing involvement with businesses in China.
Reuters’ review found that Tan controls more than 40 Chinese companies and funds as well as minority stakes in over 600 via investment firms he manages or owns. In many instances, he shares minority stake ownership with Chinese government entities.
Several investors interviewed by Reuters expressed concern that the scope of Tan’s investments could complicate the task of reviving Intel. Along with Taiwan Semiconductor Manufacturing Co and Samsung Electronics Co, Intel is one of three companies in the world making the most advanced computer chips, and the only one based in the U.S.
“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,” said Andrew King, a partner at venture capital firm Bastille Ventures. King said neither he or his fund have investments in Intel.
But some see Tan’s years of experience investing in startups in China as key competencies to revive the flagging American icon.
“He was at the top of my list and most investor’s lists of who they wanted,” Bernstein analyst Stacey Rasgon said. “He’s a legend and he’s been around forever.”
Tan made his investments through Walden International, the San Francisco venture capital firm he founded in 1987, as well as two Hong Kong-based holding companies: Sakarya Limited and Seine Limited. Tan was sole owner of Sakarya as of October 31, according to a Shanghai Stock Exchange filing, and controls Seine through Walden, according to Chinese corporate databases, which are updated daily.
Tan remains the chairman of Walden International.
Intel declined to comment on Tan’s investments in China. A spokesperson said Tan completed a director and officers questionnaire that requires disclosure of any potential conflicts of interest. “We handle any potential conflicts appropriately and provide disclosures as required by SEC rules,” the spokesperson said.
Walden did not return a request for comment. A source familiar with the matter told Reuters that Tan had divested from his positions in entities in China, without providing further details. Chinese databases reviewed by Reuters list many of his investments as current, and Reuters was unable to establish the extent of his divestitures.
It is not illegal for U.S. citizens to hold stakes in Chinese companies, even those with ties to the Chinese military, unless those companies have been added to the U.S. Treasury’s Chinese Military-Industrial Complex Companies List, which explicitly bans such investments.
Reuters found no evidence that Tan is currently invested directly in any company on the U.S. Treasury’s list.
The Commerce Department’s Entity List prohibits U.S. firms from exporting controlled technologies to companies but does not bar investments in them. The Pentagon bans companies connected to the Chinese military from the U.S. military supply chain.
Intel has a $3 billion contract to make chips for the U.S. Department of Defense and participates in two other Defense Department efforts that focus on developing cutting-edge chips.
The Defense Department did not comment on Tan’s investments.
Reuters presented its findings to the PLA through the Chinese Embassy in Washington, which had no comment on the findings, but spokesperson Liu Pengyu said: “We would like to reiterate our firm opposition to the U.S. generalizing the concept of national security, distorting and smearing China’s military-civilian integration development policy, and undermining normal China-U.S. economic and trade cooperation.”
WEB OF INVESTMENTS
Tan invested at least $200 million in hundreds of Chinese advanced manufacturing and chip firms between March 2012 and December 2024, including in contractors and suppliers for the People’s Liberation Army, according to a review of Chinese corporate databases cross-referenced with U.S. and analyst lists of companies with connections to the Chinese military. (For a complete list, see this FACTBOX.)
Reuters identified 20 investment funds and companies where Walden is currently a joint owner along with Chinese government funds or state-owned enterprises, according to Chinese corporate records. The government funds are mostly from municipal governments of Chinese tech hubs like Hangzhou, Hefei, and Wuxi.
Walden has also invested in six Chinese tech firms alongside leading PLA supplier China Electronics Corporation, which was sanctioned by President Trump in 2020 as part of an executive order that banned purchasing or investing in “Chinese military companies.” CEC did not respond to a Reuters request for comment.
“In this political climate, (China ties) would be something that responsible business leadership at a company like Intel would at least have a serious conversation about how to try and manage,” said Santa Clara law school professor Stephen Diamond. “It’s obviously politically sensitive and the board would certainly want to know about it.”
Reuters sought comment from 11 out of 14 members of the Intel board who did not respond.
Some of Walden’s investments were highlighted in a report published by the U.S. House Select Committee on the Chinese Communist Party in February 2024, which found the firm made at least six other investments totaling $161 million in firms with links to the Chinese military between 2001 and 2022.
As one of the earliest Silicon Valley venture capitalists to invest in China, Lip-Bu Tan was a sought-after benefactor and mentor in the booming tech scene of the early 2000’s.
Tan was a seed investor in Semiconductor Manufacturing International Corp, China’s largest chip foundry, which is now under sanctions by the U.S. government due to its close ties to the Chinese military. Tan first invested in SMIC in 2001, a year after it was founded, and served on its board until 2018. The House committee’s final report said Walden exited SMIC in January 2021. SMIC did not respond to a Reuters request for comment.
The most recent record of a divestment by Tan from a Chinese entity that Reuters could identify was in January, when a Walden fund exited Ningbo Lub All-Semi Micro Electronics Equipment Company, which supplies chips for Chinese defense firms and research institutes, according to Chinese corporate data. All-Semi did not respond to a request for comment.
(Reporting by Max Cherney and Stephen Nellis in San Francisco and Eduardo Baptista in Beijing; editing by Kenneth Li and Michael Learmonth)
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