Intel holds shares in dozens of Chinese AI and semiconductor startups, reports say, raising concerns from the U.S. government; it may have to sell some of its shares
Intel, the world's largest semiconductor manufacturer, is reportedly accelerating its investments in Chinese AI startups. The U.S. government has been growing increasingly wary of Intel's investments in China, and it has been pointed out that the company may be forced to sell some of its Chinese technology-related stocks.
Intel venture arm's China tech stakes raises alarm in Washington
Intel Capital's investments in Chinese AI startups draw US govt attention — firm invests in 43 Chinese tech companies | Tom's Hardware
https://www.tomshardware.com/tech-industry/intel-capital-investments-in-chinese-ai-startups-draw-us-govt-attention
Intel Capital betting big on Chinese AI startups - Silicon Valley Business Journal
https://www.bizjournals.com/sanjose/news/2024/07/16/intel-capital-meeting-big-on-chinese-ai-startups.html?page=all
Intel Capital has a stake in 43 Chinese technology companies – report - DCD
https://www.datacenterdynamics.com/en/news/intel-capital-has-a-stake-in-43-chinese-technology-companies-report/
Intel's China investments may have spurred fresh US curbs • The Register
https://www.theregister.com/2024/07/16/intels_china_investments_may_have/
According to the Financial Times, Intel Capital , the investment arm of Intel, holds shares in 43 Chinese technology startups and has invested in more than 120 Chinese companies since its establishment in the early 1990s. Some of the Chinese companies in which Intel holds shares are in areas such as AI and semiconductors that the U.S. government is wary of investing in.
Most recently, Intel invested $20 million in AI company AI-Link and $91 million in silicon photonics startup North Ocean Photonics . According to the Financial Times, Intel holds stakes in 16 China-based AI companies and 15 semiconductor companies.
Intel is known for being an early investor in China's technology sector, investing a total of $670 million in over 110 Chinese technology companies in 2014, and $67 million in eight companies in 2015. Intel also invested in iFlytek , a company that developed AI voice recognition technology that was later sanctioned by the U.S. government. Since 2015, Intel has done $1.4 billion worth of deals in China, but this is the total amount of individual transactions, so the actual total investment amount is unknown.
Unlike venture capital firms Sequoia Capital and GGV Capital, which separated their Chinese operations due to political pressure, Intel continues to invest in China. Market experts predict that Intel is actively investing in China's AI sector because it has missed out on many business opportunities in the United States.
'The fear of being left behind in the age of AI may be creating a sense of urgency at Intel Capital,' an anonymous source who works at a Chinese venture capital firm told the Financial Times. 'Intel is facing very stiff competition in the AI field in the US and cannot afford to be left behind. So it needs to look for places around the world to put its money into AI, and China is one of the few options.'
Rising geopolitical risks between the US and China are increasing scrutiny of private investments in areas such as AI and semiconductors. New US regulations restrict US companies from investing in China's AI and semiconductor sectors because AI and semiconductor manufacturing technology could ultimately be used for military purposes. As a result, Intel, which continues to invest heavily in China's technology sector, may be forced to sell some of its investments in Chinese companies.
Indeed, the restrictions have caused Intel to significantly reduce its investment in China over the past 18 months, with only three deals completed in the country since the beginning of 2023.
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