Intel Capital, the company’s venture capital arm, owns stakes in 43 tech startups based in China.
According to analysis carried out by the FT, since it was established in the 1990s the venture fund has invested in more than 120 companies from the region, including AI startups and organizations operating in the semiconductor space.
In one instance, the FT reported that Intel Capital put up funding to help launch AI voice recognition group iFlytek. Although Intel sold its three percent stake in the company in 2004, iFlytek became one of six Chinese companies banned by the US government in 2019 for its alleged role in human rights abuses in Xinjiang.
The US government has existing regulations in place that attempt to limit access to AI chip technology for China but last month, the Biden administration announced it was finalizing legislation that would stop US companies from financing Chinese firms developing advanced technologies that could be used for military purposes.
The FT reported that although the US Treasury is considering exemptions for some venture capital transactions, once those regulations come into force Intel Capital is likely to be forced to sell its stake in Chinese companies.
In March, it was announced that Intel would receive $8.5 billion in direct funding, $11bn in low-interest rate loans, and a 25 percent investment tax credit on up to $100bn of Intel’s capital investments under the Act. It will be used to support the company’s investments in Arizona, New Mexico, Ohio, and Oregon, where the company is expanding its chipmaking facilities.
It is the largest funding package awarded to date by the US government under the CHIPS Act.
However, a month later, Intel found itself in the firing line of US politicians after it was revealed that Huawei’s first AI-enabled laptop, the MateBook X Pro, contained Intel's new Core Ultra 9 processor.
Although there was no suggestion at the time that Intel violated any sanctions by supplying the chips to the Chinese company – Intel received a license to ship laptop central processors to Huawei in 2020 – US politicians who are vocal critics of China said that any authorization of the shipment by the Commerce Department “would be unacceptable and a failure to enforce export controls against a blacklisted champion of the Chinese Communist Party.”
According to Intel, the company currently employs 12,000 workers in China, with business in the region accounting for 27 percent of Intel’s revenue in 2023.
