Shares of Intel slid 3.2% in pre-market trading to $46.48 on April 2, giving back a chunk of the prior session's 8.8% rally, as a Reuters investigation revealed the chipmaker is funneling yet another $15 million into AI startup SambaNova Systems — a company chaired by Intel's own CEO, Lip-Bu Tan.
$50 Million and Counting, but Nvidia's Lead Stays Vast
Intel's latest investment, subject to regulatory approval, would push its ownership of SambaNova to 9%, following a $35 million infusion in February that had lifted its stake to 8.2% from 6.8% a year earlier. The February money was part of SambaNova's $350 million Series E round to advance its chip architecture, pitched as an alternative to GPU-based AI systems. For Intel, roughly $50 million in total buys a minority position in a startup once valued at $5 billion in 2021 but later marked down to roughly $2.4 billion by BlackRock. That's pocket change for a company with a $200 billion+ market cap — but it underscores Intel's inability to build, rather than buy into, a competitive AI accelerator of its own.
The CEO Conflict That Won't Go Away
The deal details show Intel continues to pursue transactions that may increase the personal fortune of Tan, a wealthy venture capitalist whom the chipmaker hired a year ago to turn it around.
Two corporate governance experts told Reuters such Intel transactions raised red flags because of the conflicts inherent in dealmaking with Tan's portfolio companies.
Intel says it "maintains rigorous, well-established governance and conflict-of-interest policies." The optics still make institutional shareholders uneasy.
A Strategic Hedge, Not a Game-Changer
SambaNova can benefit from Intel's global reach and manufacturing base, while Intel gets a chance to finally make its mark on a market that has largely passed it by.
SambaNova expects to ship its next-generation accelerators later this year with SoftBank already signed up as a customer. But a 9% stake gives Intel no control over product direction. Intel previously explored a full $1.6 billion acquisition of SambaNova, but those talks collapsed.
Today's Dip Is About the Market, Not SambaNova The -3.2% pre-market slide tracks broader weakness — S&P 500 futures down 1.1%, Nasdaq futures off 1.5% — rather than investor punishment for the deal. Still, the steady drip of governance questions around Tan's overlapping interests adds a credibility tax that Intel can ill afford during its turnaround.