Intel’s new CEO, Lip-Bu Tan, appears to be caught in a power struggle within the company’s Board, particularly after President Trump’s call for his resignation.
Since Tan took charge in March, tensions have escalated. The central debate revolves around whether Intel should focus on manufacturing its own chips or pivot away from that expensive segment entirely.
Tan argues that maintaining in-house chip production is crucial for the independence of American technology.
Some board members, including Chairman Frank Inai, are advocating for spinning off or selling the chip-making unit.
Reports indicate that discussions with companies like Nvidia and Amazon have taken place. Tan even looked into potentially selling Intel to Taiwanese chip giant TSMC, but that idea didn’t progress.
This internal conflict is stalling essential initiatives, including multi-billion dollar efforts to expand chip production facilities.
Efforts to acquire artificial intelligence companies, which are viewed as vital to competing with rivals like Nvidia and AMD, are also seemingly at a standstill, according to reports.
Tan has reportedly expressed concern that his efforts to revitalize Intel have hit a wall. Following Trump’s public comments suggesting Tan’s resignation, the atmosphere grew increasingly tense.
Trump’s remarks mainly stem from Tan’s previous leadership at Cadence and his investments in Chinese companies, some of which have military ties. Cadence had recently reached a settlement related to federal claims, admitting to selling chip design tools to Chinese military universities for over $140 million.
This scrutiny is not new. Earlier this week, Senator Tom Cotton raised alarms about Tan’s connections to Chinese firms, and Senator Bernie Moreno joined the chorus, calling for Tan’s removal, particularly since Ohio is home to several Intel projects facing delays.
In defense, Intel affirmed its commitment to U.S. economic security and stated that both the company and the board align with Trump’s “America First” agenda.
Leadership discussions have reportedly been intensive, focusing on strategy and execution.
Recently, Intel has been tightening budgets, including plans to cut 15% from new European facilities and slow progress on major Ohio projects.
In a memo to employees, Tan emphasized the need for all investments to be economically justifiable, stating, “There are no more blank checks.”
Before Trump’s comments, Tan had been working on establishing relationships within the new administration, particularly with Commerce Secretary Howard Lutnick, presenting his turnaround strategies.
There are indications that if Tan can secure customers like Apple, the administration would back Intel.
Tan’s relationship with the previous CEO, Pat Gelsinger, adds another layer of complexity. Gelsinger departed shortly after the recent elections, and there were noted disagreements between Tan and other board members during that time.
One former board member hinted that Gelsinger’s connections could have provided Intel with an edge in navigating the Washington landscape.
For the moment, Intel insists it will continue to collaborate with the administration, although the combination of political pressure and internal strife leaves Tan with the daunting task of proving he can lead the company back to stability.
This post is open for comments from Intel, the White House, and relevant parties.
