It wasn’t my plan to find myself embroiled in international intrigue involving semiconductors. Armed with a law degree and an MBA, I began my career as a Wall Street analyst at the turn of the century, and I worked on several sides of the fence over the next few years. I dipped my toe in the white-shoe law firm world and spent time at a hedge fund—I was even interim general counsel for the Dallas Stars NHL team for several months.
Little more than a month-and-a-half ago, U.S. Senator Tom Cotton set off a maelstrom with a letter seeking an investigation into prolific venture investing in China by Lip-Bu Tan, a direct result of my research and subsequent related reported. This was magnified by President Trump’s call for his removal, supporting our long-held view that his own and Intel leadership’s complicated history with China should be disqualifying.
Despite Intel’s desperation for both the injection of capital and a signal of government support, most striking in the unprecedented events of this summer was the glaring omission of any government ability to exert control or influence. Instead, it has a default “vote alignment” with the board, an admission of the lack of will or ability to control or constrain Intel’s board and leadership.
Intel’s commercial codependence with Beijing is equally damning. In 2024, nearly a third of Intel’s revenue came from China; Lenovo alone accounted for 12%. When layoffs and dividend cuts followed, Intel chose not to pivot but to lobby Washington—fighting efforts to restrict China investments, and, as Politico exposed, leveraging Treasury connections at the highest levels. This is a taxpayer-funded champion using its clout to shield its China business from the very rules meant to safeguard American technology. Yet the lack of control, namely, the fact that U.S. government agrees to vote with Intel’s board on matters requiring shareholder approval—and against proposals not recommended by the board—with limited exceptions: (i) where law requires otherwise; (ii) where a vote affects the government’s rights under the agreement/warrant; (iii) where a vote would reject, unwind or materially harm Intel’s relationship with the U.S. government; or (iv) where a vote would materially impair Intel’s ability to comply with the agreement/warrant. The Net-Net: passive investor, pro-board default vote, and the narrowest carve-outs applicable.
This isn’t free-market capitalism. It’s taxpayer-subsidized surrender.
Intel’s board is the archetype: directors with deep China exposure, insulated from consequences, willing to mortgage American leadership for another quarter’s numbers.
Intel isn’t an anomaly; it’s an omen. Across biotech, cloud, and chips, American corporate leaders are trading the future for fleeting profits—enabled by a governance regime that demands little more.
A New Fiduciary Duty for Economic Warfare
This is not regulation for its own sake—it’s a call for a new standard of board accountability:
In the latest demands of Intel, the government willingly relinquished the ability to exert control, despite being the largest holder of Intel’s shares. As the public announcement states, it remains a “passive” stake with default pro-board voting, absent narrow exceptions that would hinder the government’s hopeful eventual sale of the position. Intel’s press and mainstream coverage emphasize the no-seat/no-information posture. This means, effectively, that Intel’s management and board were offered billions in capital without the typical market constraints that any shareholder set to become the largest equity holder in the private markets would require. This is essentially permitting the board to side with interests, which may include those of China, against the best interests of America’s long-term national goals, effectively.
And while the government, as the investor of last resort in declining U.S. companies, effectively choosing favorites, poses innumerable concerns, the Intel investment inclination is particularly dubious yet instructive of the government’s reluctance to set parameters for U.S. security. During the Cold War, trading secrets with the Soviets meant prison. With China, that still means a bigger bonus, and the freedom to secure it by nearly any means the board and management elect. The Intel catastrophe evinces the realization that a singular goal of Delaware’s Revlon standard has proven too myopic for the moment. This is legalized economic sabotage by another name. Intel’s story is not just about one company—it’s a warning for American industry. Directors are not held liable for business-led facilitating technology transfer to adversarial regimes. There is no equivalent standard here to what is now common in cybersecurity, where directors can be held accountable for negligence in protecting networks. Why should national security matter less?
The law must change before America’s technological edge is lost for good.
Patriotism may be voluntary, but accountability cannot be. Boards that serve two masters serve neither well. America’s security—not China’s ascent—must become the first principle of U.S. corporate governance.
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
