Why Intel Stock Is Crashing Following CEO's 'Alleged Conflict' and Trump Outcry

If you own Intel shares or have retirement funds invested in the tech sector, the company's recent leadership turmoil could significantly affect your portfolio. The crisis at Intel isn't just about internal governance—it's intertwined with political interference, international tensions, and market instability.

Intel Corporation has experienced a dramatic decline in its stock value in 2024, losing over 60% of its market capitalisation. Now, fresh scrutiny over its chief executive's personal investments and potential conflicts of interest has intensified. The controversy has been further inflamed by outspoken remarks from former President Donald Trump, whose public criticisms have added to the uncertainty surrounding the company's future.

Trump's Public Outcry Rattles Markets

On 7 August 2025, Trump posted on Truth Social: 'The CEO of INTEL is highly CONFLICTED and must resign, immediately.' This statement triggered a 5% fall in Intel's shares, despite the broader market closing higher that day.

Trump's remarks came after a letter from Senator Tom Cotton, chair of the Senate Intelligence Committee, questioning whether CEO Lip-Bu Tan had divested his Chinese holdings. Cotton's letter raised concerns about Tan's investments in firms linked to defence suppliers and questioned why the Intel board had overlooked connections to sanctioned companies.

Tan responded to employees, asserting, 'There has been a lot of misinformation circulating about my past roles. I have always operated within the highest legal and ethical standards.' Meanwhile, Intel told media the company and its CEO 'are deeply committed to national security,' attempting to reassure shareholders amid mounting controversy.

Deals That Raised Red Flags

The core of the controversy relates to Tan's dual role as Intel's CEO and his extensive venture capital investments. According to Reuters, Intel approached companies in which Tan held personal financial stakes, raising questions about conflicts of interest.

One notable example involves Rivos, an AI startup where Tan served as chairman and shareholder. Intel's interest in acquiring Rivos prompted internal disagreements; the company's advisory board initially blocked the deal after discovering Tan's involvement. When Meta entered the bidding process, Rivos' valuation doubled. Meta ultimately acquired the firm, but insiders suggest Tan's position may have provided him with indirect financial benefits from the deal.

A similar situation arose with SambaNova, an AI hardware company where Tan previously served as chairman. Despite SambaNova's modest revenues, Intel was encouraged to explore a strategic investment. Sources indicate that a non-binding letter of intent exists, but both parties remain guarded about further details.

What This Means for Your Investments

For everyday investors and pension holders with exposure to the tech sector, Intel's governance issues compound existing financial pressures. The company reported a net loss of $11.6 billion (£8.7 billion) for 2024, with restructuring charges of $1.9 billion (£1.4 billion) in Q2 2025.

The human toll is also substantial. Intel plans to cut its workforce from approximately 96,400 employees to around 75,000—eliminating over 21,000 jobs—as it seeks to reduce costs amid declining revenues and mounting investor unrest.

Despite these setbacks, Intel remains the sole American company capable of producing advanced chips domestically. The firm has pledged to invest $100 billion (£74.8 billion) in US chip manufacturing and has secured nearly $8 billion (£5.9 billion) in funding through the CHIPS Act. The US government counts on Intel to supply secure supply chains for defence, AI systems, and critical infrastructure.

Governance Reforms Fall Short of Critics' Expectations

In response to the controversy, Intel introduced new policies requiring Tan to recuse himself from decisions involving personal financial interests. Oversight has been shifted to CFO David Zinsner, who reports directly to Tan. Critics argue this arrangement offers only partial independence, as Zinsner remains closely connected to the CEO.

The board continues to express confidence in Tan, citing his extensive network across the tech industry as crucial for Intel's recovery. However, many analysts question whether ongoing political pressure and unresolved conflicts of interest will hinder the company's ability to turn its fortunes around—and whether shareholders will ultimately bear the cost of trying to resolve these issues.

Disclaimer: Our digital media content is for informational purposes only and is not investment advice. Please conduct your own analysis or seek professional advice before investing. Investments are subject to market risks, and past performance does not guarantee future results.