Intel is transferring its Atom chip technology to a startup associated with its CEO.

      Intel is discreetly transferring one of its most valuable assets to a small, low-profile startup, which is managed by a longtime business associate of Intel's CEO.

      The chip manufacturer is providing RosaicLabs with access to its Atom processor technology, as indicated by a source and documents reviewed by Reuters. Atom serves as the foundation for its central processors and this type of licensing is quite uncommon for Intel, which seldom permits access to parts of its x86 architecture.

      Rosaic is headed by Amarjit Gill, an experienced chip industry executive and venture investor, who has a long-standing investment partnership with Intel’s CEO, Lip-Bu Tan. The duo helped establish the founding team of Rivos, a chip startup acquired by Meta last year, outbidding Intel, while Tan was its chairman. They also supported Nuvia, which was subsequently sold to Qualcomm.

      Details on what Intel is actually transferring

      The transfer is significant. Intel intends to provide Rosaic with the register-transfer level (RTL) code for Atom, which serves as a fundamental blueprint detailing the chip's functionality.

      This grants the customer considerable insight into Intel’s intellectual property, allowing them to create their own custom designs, according to a seasoned chip executive. Atom is specifically designed for low power consumption and minimal heat generation, making it ideal for mobile and edge devices.

      Rosaic is still relatively unknown. It submitted its initial incorporation documents in Delaware in May and lacks a website or LinkedIn profile, which is typical for chip startups operating in secrecy. Its founding team includes former members of Rivos, and a revised filing from July indicates it can secure a $10 million seed round.

      Why it appears problematic

      The optics of the situation raise concerns. Intel is currently undergoing a challenging transformation under Tan, who has implemented aggressive cost-cutting measures and is attempting to open its foundry to external customers. Licensing its intellectual property aligns with this strategy.

      However, providing rare access to a company led by the CEO’s former investment partner, which includes alumni from the startup that previously outbid Intel, raises significant questions. Reuters has previously reported on arrangements that have enhanced Tan's personal wealth. Intel chose not to comment, and Gill did not reply.

      There is also a strategic rationale. Intel seldom shares its x86 architecture, and allowing access to Atom for an agile startup could cultivate markets that it cannot pursue independently. Competitors are already hastening to develop custom silicon for the AI era. Whether these advantages outweigh the governance concerns is something that Intel's board and investors will need to consider.