Shares of Intel Corporation ( INTC ) are trading lower Friday following reports of financial connections of the company's new CEO, Lip-Bu Tan, to China's tech sector, including links to companies associated with China’s military.

What To Know: According to a Reuters report, Tan controls over 40 Chinese companies and investment funds, and holds stakes in more than 600 others, including several with reported ties to the Chinese People’s Liberation Army (PLA).

Among his investments is China's largest chip foundry, Semiconductor Manufacturing International Corp, which is under U.S. sanctions for its military links. This raises concerns given Intel’s role as a major supplier for the U.S. Department of Defense.

Despite the legality of such investments, Tan’s extensive involvement with Chinese tech companies, some linked to the PLA, has raised alarms about potential conflicts of interest, especially as Intel ( INTC ) aims to reclaim leadership in advanced chip manufacturing. Intel ( INTC ) responded to the reports, stating that Tan had disclosed potential conflicts as required by SEC rules and that any concerns would be handled appropriately.

This development has added to Intel’s ongoing struggles, with the company's stock down over 47% in the past year, as it faces challenges in the competitive semiconductor industry.

INTC Price Action: Intel ( INTC ) shares are down 4.15% at $19.06 at the time of writing, according to Benzinga Pro.

Read Next:

Inflation Cools, Yields Continue To Climb: Why Markets Aren’t Ruling Out A May Rate Cut