In the U.S.-China Tech Race, Corporate Governance Is the Weak Link

America’s geopolitical future increasingly hinges on private technology, and corporations wield influence once reserved for nation-states. Few cases better illustrate the risks of outdated governance standards than Intel—once a national champion, now at the center of a high-stakes global competition. But with that influence has come a troubling trend: strategic decisions by corporate boards that prioritize short-term profit and international entanglements over long-term national security. 

Intel’s recent trajectory, spotlighted by Sen. Tom Cotton’s letter to the company’s board chair earlier this week questioning CEO Lip-Bu Tan’s ties to China and the administration’s subsequent call for his removal, is a striking example. The company’s legal but extensive investments in China highlight how outdated U.S. corporate governance standards have failed to adapt to the modern era.

Intel’s strategic missteps and board complicity

Intel, once a leader of America’s semiconductor industry, was granted $19.5 billion through the CHIPS and Science Act, a program aimed at revitalizing domestic chip manufacturing. In 1990, the U.S. produced nearly 40 percent of the world’s semiconductors. Today, that number has dropped below 12 percent, and none of the most advanced chips are made domestically. Taiwan manufactures more than 60 percent of the global supply and over 90 percent of cutting-edge chips. Intel was positioned to reverse this trend, but a series of strategic missteps, compounded by deepening ties to China, undermined that potential. 

Despite the CHIPS Act’s guidance discouraging such activity, Intel’s venture arm directed capital into at least 43 Chinese A.I. and semiconductor startups, more than any other U.S. firm, as first reported by Future Union. At the same time, Intel has invested more than $1.5 billion into Tsinghua University, a top-ranked technical university considered Beijing’s equivalent of MIT and closely tied to the People’s Liberation Army and the Chinese Communist Party, counting alumni that include Chairman Xi. Despite the risks of technology transfer and IP theft,  Intel maintained its relationship with Tsinghua, aware of its role in advancing China’s military capabilities. Its subsidiary, Intel China Research, continues to run A.I. projects in Shenzhen, a known hub for military technology.

These decisions were not oversights. They were board-approved strategies. Intel’s board includes figures like Lip-Bu Tan and Jim Goetz, who are associated with venture firms Walden International and Sequoia Capital, respectively—both named by the House Select Committee on the Chinese Communist Party as facilitators of technology transfers to China, many of which operate adjacent to China’s military ambitions. Another director, Risa Lavizzo-Mourey, led the Robert Wood Johnson Foundation, which collectively made more than 55 China-linked investments, per Future Union’s Rubicon report. A Reuters investigation with Future Union found that Intel’s board member and CEO, Lip-Bu Tan, had minority investment in over 600 Chinese startups between 2012 and 2024, including 40 control-level interests, eight with links to the People’s Liberation Army. It remains unclear whether these holdings were disclosed to Intel or its board, but they underscore the need for clearer rules and heightened standards around board member conflicts. 

Intel’s commercial dependence on China further illustrates the risks. In 2024, the company derived 29 percent of its global revenue from China, with computer maker Lenovo accounting for 12 percent. That same year, Intel laid off 15,000 employees, suspended dividends and lobbied Congress to ease investment restrictions. According to Politico, this lobbying effort found an ally in the Treasury department—widely seen as a roadblock to tougher controls—where Secretary Janet Yellen’s chief of staff was married to Intel’s head of government affairs. The result was a taxpayer-funded enterprise leveraging its influence to resist the very safeguards designed to strengthen U.S. industry. This was not market-driven adventurism. This was a subsidized surrender.

Delaware’s fiduciary duties: a short-term focus

Corporate boards are meant to safeguard long-term value, but that depends on their independence. In many major tech companies,  including Alphabet, CrowdStrike, Lyft, Meta and Zoom, supermajority voting rules and dual-class share structures concentrate power in the hands of CEOs and limit the board’s ability to provide meaningful oversight. This includes the authority to remove leadership. These realities undermine confidence in a board’s role as a check on executive power. Intel’s decisions reflect how such weaknesses in corporate governance can erode America’s technological leadership. 

For example, 39 percent of Fortune 500 CEOs serve less than 5 years, and the average C-suite tenure is 4.6 years, according to recruiting firm Spencer Stuart. This reinforces a culture of “short-termism,” where decisions are guided by immediate financial results and executive bonus incentives, rather than long-term value. When leadership changes frequently, the consequences of technological decline or strategic missteps are foisted on their successor. Boards, whose tenures often mirror those of CEOs and operate under dual-class share structures and supermajority voting rules, frequently lack the independence or incentive to intervene. The result is the façade of true board independence without substance. 

Delaware law, which governs most U.S. public companies, supports this dynamic. Fiduciary duties are narrowly defined: boards are expected to maximize shareholder value, typically in the shortest possible timeframe, leaving long-term competitiveness secondary to short-term profits. The Revlon doctrine enshrines this standard, requiring directors to prioritize the highest immediate return, regardless of longer-term risks. Directors bear no explicit obligation to consider national security or protect U.S. strategic technologies. 

In 2016, AMD structured a joint venture to transfer its most advanced semiconductor to China, evading CFIUS review, in exchange for upfront payments. While legal, the deal gave China a strategic foothold in chip manufacturing at the expense of U.S. leadership. Directors bear no explicit obligation to protect America’s strategic technologies from adversarial regimes. This kind of legal loophole enables corporate boards to sideline national security in pursuit of quarterly earnings, effectively sanctioning economic self-sabotage. 

Thus, Intel’s case is not unique. These dynamics reward expediency and self-interest over stewardship. And that will remain in the absence of new fiduciary considerations.

Broader instances of technology transfers under duress

China has long leveraged global capital markets not just to generate financial returns but as a strategic tool to access foreign intellectual property. While many Chinese investors present themselves as commercially motivated, numerous cases have raised concerns about the unauthorized transfer of sensitive technologies. Smaller firms and startups, often unaware of the geopolitical implications, are particularly susceptible to such ploys during due diligence or partnership discussions, contributing to the decline of once-promising businesses. 

The challenge for larger, publicly traded technology companies takes a different form. China has leveraged the structural weaknesses in corporate governance, particularly pressure on executives to deliver short-term results. Through joint ventures or market entry requirements, U.S. firms have at times agreed to share proprietary technology in exchange for continued access to the Chinese market. This practice, commonly referred to as “forced technology transfer,” has been criticized by the U.S. Trade Representative and European industry groups, which report that companies operating in China have faced “irreparable harm.” 

This practice is a standard feature of China’s industrial policy playbook. In sector after sector—biotech, cloud computing, semiconductors—U.S. corporations have accepted terms that many argue endanger national competitiveness. The pattern is consistent: under pressure to achieve short-term targets, boards and executives greenlight deals that erode long-term technological edge and, by extension, national security interests.​ 

And it’s not limited to  Intel. A wide swath of U.S. technology companies, from Apple and IBM to Ford, Tesla, Eli Lilly, Johnson & Johnson, Qualcomm and AMD, have faced the same mandate: share core IP or lose market access. In many cases, the choice has been clear, and compliance has come at a strategic cost.  

The case for a new governance paradigm  

The judiciary crafted America’s outdated Revlon standard of review in a different era, ignoring today’s geopolitical reality. Multinational corporations in sectors like semiconductors, artificial intelligence, quantum computing and biotechnology are inherently geopolitical actors whose decisions shape national power. A new governance paradigm would entail:

• Incorporate national security into fiduciary responsibilities: Boards in strategic sectors like semiconductors, A.I., quantum computing and biotech should be required to consider geopolitical risks when evaluating foreign partnerships and technology transfers, especially when public funding is involved. 
• Limit conflicted board memberships: Directors with substantial investments or institutional affiliations in adversarial nations should be prohibited from serving on boards of companies operating in critical industries, ideally eliminating conflicts of interest. 
• Strengthen oversight for federally subsidized companies: Corporations receiving significant federal subsidies above a certain threshold should be subject to independent national security audits and pre-deal reviews of foreign partnerships. Foreign partnerships should be disclosed and reviewed—before they’re signed.
• Establish personal liability for directors: Similar to current cybersecurity accountability standards, directors should face consequences for decisions that endanger technological sovereignty. In cases of gross negligence or willful oversight leading to significant IP loss, a director could forfeit stock awards or bonuses. 
• Create technology and security committees: Companies should establish standing subcommittees, similar to those required by the SEC or for stock exchange listings in key industries, focused on cybersecurity, intellectual property protection, national security exposures and foreign influence risk.
• Establish a government oversight body: A permanent, nonpartisan oversight mechanism, shielded from political and corporate influence, could review corporate decisions with potential national security implications and ensure consistent enforcement of fiduciary standards.  

During the Cold War, trading secrets with adversaries sparked national outrage. Today, boards like Intel’s can do something similar without breaking a single law. That’s precisely the problem: our corporate governance standards haven’t caught up with reality. A critical loophole allows directors to ignore national security while chasing quarterly returns. 

These standards ignore the stakes of modern technological competition—particularly in foundational,  “stacking” technologies like A.I.—and relegate long-term security to an afterthought. Intel’s recent decisions represent a voluntary surrender of America’s technological edge, facilitated by outdated governance frameworks designed for a different era.  

We now live in a world where capital moves faster than regulation, and private corporations shape national destinies. Intel’s leadership made China a fixture of its long-term strategy with the backing of American taxpayers. That is not a failure of policy. It is a failure of governance. Intel’s example demonstrates the urgent need to modernize fiduciary responsibilities. Patriotism cannot be legislated. But we can, and must, mandate responsibility.