The new Intel CEO, Lip-Bu Tan, has found himself similarly under fire. Now, critics are raising serious questions about his extensive previous connections with Chinese firms. This level of scrutiny would increase after President Donald Trump first called for Tan’s resignation, citing conflict of interest. In a subsequent memo to Intel employees, Tan sought to address the “misinformation” on his recent industry roles. Secondly, he took on the ethical issues that Trump and Senator Tom Cotton had complained about.
Tan took over as CEO of the company in March, replacing long-serving Pat Gelsinger. Since then, he’s been walking a tightrope of an environment where his ties to Chinese companies have come under attack. Under fire from all sides, President Trump agreed to Tan’s immediate resignation. He warned that such connections could threaten Intel’s capacity to meet its commitments as a corporation managing taxpayer dollars.
Senator Cotton echoed Trump’s concerns, stating, “Intel is required to be a responsible steward of American taxpayer dollars and to comply with applicable security regulations.” He further noted, “Mr. Tan’s associations raise questions about Intel’s ability to fulfill these obligations.” These accusations have made for a very difficult environment for Tan as he tries to lay down his claim to leadership at Intel.
In his memo to employees, Tan stated that he had tried to be transparent and work with the White House. He stressed that Intel is currently working to vindicate its case and rebut the allegations made against his affiliations.
“I want to be absolutely clear: Over 40+ years in the industry, I’ve built relationships around the world and across our diverse ecosystem – and I have always operated within the highest legal and ethical standards.” – Lip-Bu Tan
And in spite of that pressure, some analysts are still bullish. None of them are concerned that Tan’s connections will compromise his ability to lead Intel effectively, though. Bernstein analyst Stacy Rasgon remarked, “Unfortunately, unlike other tech CEOs, Lip-Bu does not appear to have cultivated the kind of personal relationship with Trump that would help to assuage his ire.” Rasgon strongly disagrees with the charge that Tan is “conflicted.” He even argues that the worries being raised are really motivated more by political considerations than by real ethical violations.
As Intel navigates this controversy, Tan maintains that he supports President Trump’s dedication to “advancing U.S. national and economic security.” So his commitment to these principles will be key. Ultimately, it will assist him to allay stakeholder fears and counter those who doubt his leadership.