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Thank you so much. Lip Bhutan is the CEO of Intel.
He's also the chairman of an AI chip startup called Revos.
This summer, he pitched Intel's board on buying that startup.
The board said no, I didn't expect that.
They told him he had a conflict of interest because he was
representing both sides of the deal.
Then Meta swooped in, a bidding war broke out, and Revos ended
up selling for roughly double its earlier valuation.
Ted's venture capital firm Walden Catalyst posted a
congratulations message about the successful outcome it
delivered to its investors. So is this a story about Aceo
using his company to enrich himself?
Or is this the messy reality of hiring a well connected deal
maker to rescue a sinking ship? This is one of at least three
instances where Intel has pursued deals that benefit 10
financially. According to people familiar
with the matter. Intel brought him in
specifically because of its investment network.
The same network that now creates conflicts going to walk
through the Revos bidding war, a second struggling startup called
Samba Nova where 10 also has ties, and the new policies Intel
has put in place to manage these situations.
We'll get right back into that after this break now.
Intel hired Lip Bhutan in March to turn around a company that
lost $19 billion last year. The board chose him because he
spent decades as a venture capitalist with stakes in
hundreds of chip and technology companies.
That web of relationships has already delivered results.
Tan helps clinch a $5 billion investment from NVIDIA and a $2
billion investment from SoftBank.
And Intel stock has roughly doubled since his appointment.
So here's the key point, though. Those same relationships create
a structural problem. Tan sits on both sides of the
potential deals. He owns stakes in companies that
Intel might want to buy or invest in.
And Intel's board knew this when they hired him.
They accepted that trade off. A spokesperson told Reuters that
the board believes Intel should fully leverage his vast network
to capture the new wave of industry opportunity.
Now inside this Revos situation. Tan is the chairman of Revos, a
start up building EI chips based on an open source design called
Risk V that's an alternative to the proprietary chip
architectures from companies like ARM and Intel.
Tan's venture firm, Walden Catalyst, is an investor.
When he pitched Intel on buying Revos over the summer, the board
rejected the proposal. They told him he had a conflict
and that he lacked an EI strategy to justify the
acquisition. Tan then asked one of his
lieutenants to pitch a new AI plan internally.
That led to partnership talks between Intel and Revos.
But Meta had been circling the start up for a while, and it
made an offer. Intel responded with its own
bid. Meta countered with a sweetened
package. The competition pushed the deal
value to around $4 billion, roughly double the $2 billion
valuation Revos had been seeking an earlier fundraising.
Now, Meta announced the acquisition in September.
The bidding war increased the payout for Riva shareholders,
including Tan. OK, keep going here.
Reuters could not determine exactly how much Tan profited
because of financials or private, but his venture firm
publicly celebrated the outcome. That blog post matters because
it shows the firm taking credit for a win that came partly from
Intel's participation in the bidding process.
Now there's a second start up in the story, too.
Salma Nova is an AI computing company that Tan has backed
since 2018 through his venture firm Walden International.
No relation to me, my name is Will Walden.
He became executive chairman in 2024 after the company struggled
to compete against NVIDIA. Salma Nova raised money at a $5
billion valuation in 2021, but the business did not grow as
expected. Customers preferred Nvidia's
chips, which work across a wider range of AI applications.
Samba Nova laid off about 15% of its staff earlier this year.
Now Tan pitched Intel on buying Samba Nova the summer, according
to three people familiar with the talks, and the logic was
that the acquisition could provide technology and talent to
help Intel enter the AI chip market.
Deal talks are ongoing, and Intel and Samba Nova have signed
a non binding term sheet. That means the company Tan
chairs might buy a company that Tan holds a leadership role in a
financial stake. So what do we know right now?
Intel has put policies in place to manage these conflicts.
Tent cannot attend or vote in board meetings or investment
committee meetings when he has a personal interest in the
outcome. And if he recuses himself from a
decision at Intel Capital, the investment arm authority goes to
the chief financial officer, David Zinsner.
That structure is supposed to create separation, but Zinsner
reports directly to Tan, which limits how much independence the
arrangement actually provides. Now hold out of this.
Tan took different direct control of Intel Capital shortly
after becoming CEO. He reversed an earlier plan to
spin off the investment unit. He reorganized it so that it
reports directly to him in the investment committee now
consists of just two people, Tan and Zinsner, the executive who
works for him. And since then, Intel Capital
has invested in several companies where Tan already has
a stake through his personal investment vehicles.
One example is Protein Techs, which announced a late stage
funding run in September. Intel Capital increases existing
position in the startup, which also counts Tan's firms as
investors. Some Intel employees have
reportedly felt pressure to pursue deals in Tan's portfolio
to win his support, and two corporate governance experts
consulted said this arrangement raises red flags numerous and
the conflicts are inherent in forging deals with their own
portfolio companies. One of those experts also
acknowledged the upside. You don't want to block good
investments just because your CEO is well connected.
But the experts said Tan should have dropped his portfolio
investments, place them in a blind trust or set up a special
committee of the board to evaluate deals where he was a
stakeholder. The Intel did not say whether
Tan had taken any of those steps.
Now here's where this goes. The Trump administration took a
9.9% stake in Intel this summer through a $8.9 billion
investment. That deal effectively made
American taxpayers shareholders in the company.
The investment came from CHIPS Act funding and the Department
of Defense's Secure Enclave program.
Intel is the only U.S. company capable of manufacturing
advanced chips on American soil, and the government wants to keep
it that way. The government's stake is
passive, no board seat. They don't have any governance
rights. But it adds another layer to the
stakes here. If Intel's CEO is pursuing deals
that benefit his personal portfolio, the public has a
financial interest and whether that behavior is appropriate.
And Tan does not see his deal making as conflicted, according
to people familiar with this thinking.
He believes his positions at these startups and at Intel make
him uniquely able to negotiate transactions that benefit all
parties. Intel's spokesperson said the
company has an unwavering commitment to the highest
standards of corporate governance, integrity and
accountability. This is a messy situation
without a clean answer. Intel needed someone with deep
history relationships to rescue the company.
They hired A venture capitalist with stakes and hundreds of
firms. Now they're navigating the
predictable conflicts that come with that choice.
Canada has delivered results. The stock is up.
The NVIDIA and SoftBank investments are real, but so are
the questions about whether Intel's board can adequately
supervise the CEO who controls the investment arm and whose
portfolio companies keep showing up in Intel deal flow.
The regulations require disclosure of related party
transactions, but Intel's next filing is not due until spring
of 2026. Until then, shareholders and
taxpayers are left trusting that the policies Intel put in place
are enough. Hey, thank you so much for
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