How a Silicon Valley dealmaker charmed Trump and gave Intel a lifeline

By Max A. Cherney and Jeffrey Dastin SAN FRANCISCO, Dec 24 (Reuters) – It was a Thursday before dawn in Silicon Valley when Intel CEO Lip-Bu Tan found himself under attack by the president of the United States. “The CEO of INTEL is highly CONFLICTED and must resign, immediately,” U.S. President Donald Trump wrote on his Truth Social platform at 4:39 AM Pacific Time on August 7. Before he was Intel CEO, Tan had been a prolific investor in companies in China. Trump and Tan had not met. While technology leaders from Nvidia, AMD, OpenAI, Amazon, Google and Palantir had all recently traveled to see Trump, the head of America’s most storied chipmaker had not spent time with the president since joining Intel in March. Politics was not Tan’s top priority. It had been more than 20 years since Tan, 66, had donated to a presidential election campaign. Though he spoke with a handful of U.S. government leaders, including Commerce Secretary Howard Lutnick in April, the Intel CEO did not fill the company’s top policy job in Washington for months after its prior holder, a Democrat, resigned. Almost immediately after Trump’s attack, Intel scrambled to lock down time with the president, two people with knowledge of the situation said. That culminated in the most pivotal, roughly 40-minute meeting of Tan’s decades-long career. Previously unreported details about Tan and Intel show how a man Trump had accused of supporting China’s interests came away from the meeting with a commitment from the U.S. government to invest billions of dollars for a nearly 10% stake in the company. The deal gave Intel a too-strategic-to-fail aura and opened doors to potential partners who might want to win the president’s favor. It also may pave the way for the government to take more equity stakes in businesses the administration deems strategic, in what some investors previously described to Reuters as ushering in a new era of U.S. industrial policy. Intel’s share price has risen around 80% since Tan’s appointment, outpacing the percentage gains of the S&P 500 and Nvidia in that time. Reuters spoke with around 20 people who are current and former Intel employees, government advisers, and Tan’s industry contacts. Some of them questioned whether Tan has the technical acumen to restore Intel’s lead in chip manufacturing and find a winning artificial intelligence strategy, even as his skills as a dealmaker served him well in the Oval Office and elsewhere.  Though Intel’s chips powered some of the first mass-produced PCs, years of dysfunction had allowed foreign competitors such as TSMC to eclipse Intel in high-end chip production.  In statements, an Intel spokesperson said Tan needed no persuading to engage with the Trump administration. Early on, he elevated government affairs, among other functions, to report to him. Intel announced in December that a Trump economic adviser would helm the unit. “Lip-Bu Tan has a long, and well-established history of engagement in Washington, both before and after joining Intel,” the spokesperson said. Intel declined to make Tan available for an interview.  A White House spokesperson said President Trump was using his executive power to get “the best bargain for the American taxpayer” and safeguard U.S. security. “The Administration’s historic deal with Intel is one of many initiatives to reshore semiconductor and other critical manufacturing back to the United States,” the White House spokesperson said. 40 MINUTES IN THE OVAL OFFICE Before heading into the White House, Tan called on his own allies who had forged relationships with the president, including Microsoft CEO Satya Nadella and Nvidia CEO Jensen Huang, to vouch for him, said two people familiar with the discussions. Tan “spoke, as he does often, with confidantes who would have relevant insight and perspective ahead of his meeting with President Trump,” the Intel spokesperson said. Nvidia and Microsoft did not comment for this story. Prior to the meeting, Tan strategized with his advisors on how to convince Trump he was an American patriot by discussing his personal story and his commitment to the United States, the two people said. He also prepared to discuss his China holdings, the people said. Tan has made some 600 investments in China, some linked to the country’s military, according to Reuters reporting. Those connections to China are what ultimately landed him in the crosshairs of the president. Two of Tan's investment firms — Walden International and Walden Catalyst — did not answer requests for comment. A third, Celesta Capital, said it had made one China investment that it exited in 2020. His dealmaking acumen, Celesta Capital said, is a key reason Tan “is so well suited to lead Intel’s current moment.” Just two cabinet members joined the meeting between Trump and Tan in the Oval Office: Lutnick and Treasury Secretary Scott Bessent, one of the people said. Trump questioned the Intel CEO about how he planned to turn the company around, the person said. Tan had already told Lutnick in a prior meeting that he did not want billions in handouts that the U.S. owed Intel as part of the CHIPS Act, the Commerce Secretary said in a video on X in August. Neither Lutnick nor Tan said why. The grant money had been offered to companies under the 2022 CHIPS Act in exchange for reviving domestic manufacturing so the U.S. could reduce its reliance on foreign semiconductor production.  The administration of former President Joe Biden had announced dozens of these awards to various chip-related companies.  So when Trump proposed that the U.S. receive equity in exchange for giving Intel more CHIPS Act money – an idea that two sources said Lutnick had talked about for weeks with government staff – Tan struck a deal. Intel declined to comment on the specifics of the private conversation, but Lutnick later said in the video that equity made the exchange “fair.” The deal gave Intel a $5.7 billion cash infusion and set up the U.S. government to be its largest shareholder. After the initial meeting, Tan pledged to “make Intel great again” in the video that Lutnick posted on social media, with the caption, “The Art of the Deal: Intel.” Within weeks of his White House coup, Tan finalized a partnership with Nvidia, securing $5 billion from its CEO Huang who called Tan his “long-time friend.” Unlike Intel, known for manufacturing chips called central processing units, Nvidia designs the world’s top chips for AI. Trump celebrated the deal on social media, posting an AI-generated image of himself staring at a chart of Intel’s stock and showing how the value of the U.S. stake had risen by 50% after Nvidia’s investment. INTEL’S VENTURE CAPITALIST CEO Born in Malaysia to a Chinese-language journalist and a teacher, Tan started out in the hard sciences and had plans to become a nuclear engineer, but he ultimately went to business school and in or around 1983 got his first job in venture capital in California.  During his career, Tan established himself as a man with a golden touch with startups that successfully were sold to other companies or went public. He amassed an estimated personal fortune well above $500 million. Tan’s dealmaking savvy is helping Intel only to a point, three people with knowledge of the company said. For instance, Tan’s bid to buy SambaNova was the subject of internal debate given how the startup makes application-specific AI chips while the market favored general-purpose ones. Additionally, these people said, chipmaking requires more engineering expertise than a typical tech business. Factories that make advanced chips rely on tools so precise they could pinpoint a U.S. quarter-dollar coin as far away as the moon. Some of its most successful executives, like Nvidia’s Huang, are electrical engineers by training. Still, some Wall Street analysts say Tan is an excellent choice for Intel CEO, with decades of ch…

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