Intel Capital's China Play A Concern For Washington: FT
Intel Capital, the venture arm of Intel Corp (NASDAQ:INTC), is standing out as a notable foreign investor in Chinese AI and semiconductor startups.
This comes as the $147 billion chipmaker is receiving major funding from Washington to compete technologically with Beijing.
Intel's involvement in Chinese tech, particularly AI, has raised national security concerns in the U.S.
Globally, the venture arm has deployed over $20 billion since the 1990s under the leadership of Anthony Lin in San Francisco.
Intel Capital has stakes in 43 China-based tech startups. Since its formation, the venture fund has invested in over 120 Chinese companies, reported Financial Times.
Earlier this year, Intel Capital participated in a $20 million fundraising for Shenzhen-based AI-Link, a 5G and cloud infrastructure firm and had led a $91 million funding round for Shanghai's micro-optics hardware producer, North Ocean Photonics, in 2022.
In June, the Biden administration announced new rules to limit U.S. financing for Chinese technology with potential military applications. The rules, whose primary target is AI and quantum computing, are expected to be sealed this year.
The company has notably slowed its Chinese investments, completing only three deals since early 2023, FT report says.
Intel Capital's portfolio in China includes 16 AI startups and 15 semiconductor companies, among others, according to the report.
Also Read: Chip Maker Intel Aims For $1B In Software Revenue By 2027
With the new U.S. regulations, Intel might be compelled to divest from some investments, although exemptions for certain venture transactions are being considered.
Meanwhile, Intel secured a substantial $20 billion in U.S. government grants and loans in March to expand its domestic semiconductor production, reflecting the significant support for the U.S. chip industry under the 2022 Chips and Science Act.
Intel's large-scale operations in China, employing around 12,000 people and contributing 27% of its global revenue in 2023, illustrate the intricate ties between the U.S. tech giant and the Chinese market.
Intel stock has lost 0.08% in the last 12 months.
Investors can access the stock via the First Trust Nasdaq Semiconductor ETF (NASDAQ:FTXL) and Strive U.S. Semiconductor ETF (NYSE:SHOC).
Price Action: At the last check on Wednesday, INTC shares were trading higher by 2.76% at $35.29.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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