President Donald Trump on Thursday called for the immediate resignation of Intel CEO Lip-Bu Tan, citing concerns over Tan’s alleged ties to Chinese firms, including companies reportedly linked to the Chinese military. In a post on his Truth Social platform, Trump declared Tan to be “highly conflicted,” stating, “There is no other solution to this problem.”

The statement sent shockwaves through markets, with Intel (NASDAQ: INTC) shares dropping 3.8% on Thursday morning, continuing earlier premarket losses.

Tan, who took over as Intel’s CEO in March following Pat Gelsinger’s turbulent tenure, had initially been welcomed by Wall Street. The company’s stock surged 15% upon news of his appointment, as investors and analysts viewed him as a strong candidate to lead Intel’s turnaround amid challenges in artificial intelligence and chip manufacturing.

However, scrutiny of Tan’s financial connections has intensified in recent months. In April, a Reuters investigation revealed that Tan—either personally or through his venture capital firm Walden International—has invested over $200 million in hundreds of Chinese tech and semiconductor firms between 2012 and 2024. Some of these investments, the report noted, involve companies with links to China’s military apparatus.

Walden International, according to Reuters, “remains invested in 20 funds and companies alongside Chinese government funds or state-owned enterprises.” Tan’s extensive background in the semiconductor industry includes leadership roles at 14 firms, most notably his tenure as CEO of Cadence Design Systems, a leading provider of chip design software.

The controversy intensified this week after Senator Tom Cotton (R-AR) sent a letter to Intel’s board raising national security concerns. Cotton highlighted Intel’s $8 billion grant from the CHIPS Act, writing, “Intel is required to be a responsible steward of American taxpayer dollars and to comply with applicable security regulations. Mr. Tan’s associations raise questions about Intel’s ability to fulfill these obligations.”

Tan’s position comes at a critical moment for Intel. The company is undergoing deep restructuring, including plans to cut its workforce by 15% as it struggles to regain its footing in the competitive chip industry. Despite some gains earlier this year, Intel’s stock is up just 1.8% year-to-date, trailing competitors like AMD, Broadcom, and Nvidia.

The mounting political and investor pressure now casts uncertainty over Tan’s leadership at a time when Intel is seeking to reestablish itself as a leader in advanced chip manufacturing and AI technologies.