($) Lip-Bu Tan: the Tiger Dad Intel Needs
The most successful tech CEO and VC no one has heard of
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Lip-Bu Tan’s first day as Intel’s CEO happens to be during Nvidia’s GTC conference. On that day, he both attended GTC – the flagship annual event of Intel’s rival in AI but also a potential customer for its foundry – and had dinner with one of Intel’s largest customers.
His ability to somehow make “copies” of himself, so he can pack more into a day, turned out to be a daily occurrence during his first 100 days at Intel’s helm. He recently broke his own record of 22 meetings in a single day and would often have two or three dinners on the same night – an “accomplishment” he somewhat proudly, somewhat sheepishly boasted on stage at Cadence’s annual conference a month ago. Perhaps he felt extra comfortable sharing something personal at this event, since he was, after all, Cadence’s CEO before joining Intel.
At 65-years-young and as a grandfather of three grandchildren, Lip-Bu (almost everyone calls him by his given name, so I will call him that here too) is soft-spoken and mild-mannered. His public demeanor is the polar opposite of the loquacious, rah-rah CEO we all expect to see on CNBC or conference stages. Yet, he is likely the most accomplished tech CEO and venture capitalist that no one has heard of.
As a VC at Walden International, the firm he founded in 1987, he has had 145 IPOs ( according to himself). Granted, this number is hard to verify. Also, not every single IPO was a blockbuster listing on the NYSE or NASDAQ; many were on less notable exchanges in Asia. Still, liquidity is liquidity, DPI (Distributed to Paid-In capital) is DPI. Most VC firms could only dream of an IPO count half as many.
At Cadence, the electronic design automation (EDA) juggernaut, Lip-Bu presided over one of the most dramatic turnarounds in tech history. When he took over in 2009, Cadence was trading at $2.42 a share, its previous CEO and four senior VPs all left on the same day, and the company was in total disarray and on the verge of being delisted. When he left the CEO post in December 2021, Cadence was trading at $180-190 a share. The company is now undisputedly one of the big three’s in the EDA world, along with Synopsys and Siemens.
Intel’s current mess is much worse than Cadence’s circa 2009, and a failure to turn things around would not only send shockwaves around the semiconductor industry, but be a stab in the heart of America’s own turnaround to becoming a manufacturing powerhouse again. Without Intel, there would be no Silicon Valley. And Lip-Bu’s energizer-bunny-like superpower and his humble mantra of “underpromise overdeliver” may just be the antidote to Intel’s woe. Unnecessary managerial layers are already shrinking, layoffs are happening, subsidiaries are being divested or spinning out with outside capital, and even a bold write-off of Intel Foundry Service (IFS)’s ill-conceived 18A chipmaking process node is being considered.
A disciplined, tough, but fair “tiger dad”, personified in Lip-Bu Tan, is exactly what Intel needs to survive.
From Johor to Silicon Valley
Born in a port town Johor, Malaysia, Lip-Bu was the youngest of five children. His one older brother and three older sisters all either have PhD degrees and/or are musicians at a concert performance level.
Lip-Bu, on the other hand, could not play any instrument and never got his PhD. His lack of a doctorate degree was something he lamented in shame only half-jokingly well into his forties as a source of constant disappointment from his mother. It’s safe to say that he grew up under classic tiger parenting that would make Amy Chua, who wrote “Battle Hymn of the Tiger Mother”, look soft.
He was, of course, no chump in any academic setting. Lip-Bu breezed through the quantum physics program in three years as an undergraduate at Nanyang University in Singapore. (It was later merged with another institution to become the National University of Singapore.) He then matriculated at MIT. His hope at the time was to get a PhD in nuclear engineering, because he saw energy production as a big problem that he wanted to help solve. He was prescient in identifying both the problem and the potential solution, but the Three Mile Island accident happened at the same time and got in the way. As he recounted that moment in an oral history interview for the Computer Science Museum, after the nuclear meltdown accident, the director of the career placement office at MIT told him point blank to get out of nuclear engineering because nuclear energy has no future in the United States.
In an alternate timeline, had that moment not occurred and Lip-Bu went on to get his PhD in nuclear engineering, then ChatGPT happened exactly as it did, he would likely still be at the center of the AI boom, except working on solving the energy bottleneck. In another less likely but still fascinating alternate timeline, where he had stayed in his hometown and never moved to Singapore nor the US to study, Lip-Bu would still probably play a major role in the AI boom. According to independent analysis, Johor is now one of the densest AI hubs, where Oracle is leading the way in constructing massive AI datacenters, a development no one could have predicted.
Of course, Lip-Bu’s real timeline didn’t turn out that bad. After swiftly dropping out of the PhD program on that placement officer’s advice, he landed in San Francisco, working for a nuclear energy consulting company. The company paid for him to get an MBA at the University of San Francisco at night time, so he could learn finance, accounting, and balance the company’s book as its “CFO” during the day. After completing his MBA, Lip-Bu did a stint at a small UK-based investment bank, Chappell & Company, before striking out on his own as a venture capitalist.
To break into VC, he was hired by Walden Capital. To convince the Walden partners to take a chance on him, he proposed to not take any salary and raise his own fund under the firm’s brand. That first fundraise was a mere $3.3 million, which he cobbled together from his father-in-law and his dad’s old friends in Malaysia. That tiny sum also became the seed that grew into Walden International, the semiconductor-focused venture fund with 100-plus IPOs under its belt.
Walden International started investing almost immediately in Asia after its founding in 1987, at a time when the term “venture capital” might as well be gibberish. Credited with introducing the venture model to the continent, Lip-Bu had to teach and train his local investors on the basics of VC in each Asian country his firm operated in – from investing, to scaling, to exiting. He was instrumental in orchestrating one of the first major IPOs of a Chinese internet company on the NASDAQ: Sina.com in 2000. He also invested in, and was on the board of, the more controversial Semiconductor Manufacturing International Corporation (SMIC), China’s national champion chip fab; he left SMIC’s board in 2019.
His extensive domain expertise in semiconductor and local knowledge of Asia, right as many Asian countries grew to become crucial elements of the global supply chain, made him an attractive board member candidate for many U.S. tech companies. One of the companies that recruited him was Cadence, whose board he joined in 2004, before becoming its CEO in 2009.
Because he was allowed to work two full-time jobs, as a CEO and a VC, the low key Lip-Bu also became a dense node of connections and relationships. Not only did he continue to invest from Walden International while running Cadence, he also co-founded Celesta Capital in 2013, another deep tech focused VC firm. In 2017, an analytics firm that measured the relationship network of tech leaders dubbed him the most connected tech executive that year, beating out more household names, like Sheryl Sandberg and Meg Whitman. No company or notable executive in the semiconductor ecosystem is more than one or two degrees removed from Lip-Bu. They are either a customer, a portfolio company, a partner, or, oftentimes, an acquisition target. He invested in Annapurna Labs, the Israeli chip design startup that Amazon acquired and is now the core team behind AWS’s ASICs product line, Trainium and Inferentia. Habana Labs was also a portfolio company, which Intel acquired to boost its internal chip design capabilities but with much less success.
Throughout this glidepath from a port town in Johor to the center of Silicon Valley, Lip-Bu perhaps only encountered one challenge he has not yet overcome – his English. As the