China success requires trusted partners – Lip-Bu Tan

"I don't invest in companies where I have questions on their ethics or if they're too smart for their own good," Tan said. "They can be very successful, but I cannot be their partner. You have to make sure that you have an ethics standard, and you have to be prepared to walk away. I want to back the guys where I can see straight into their eyes."

Tan, who is also CEO of US engineering giant Cadence Design Systems and credited with helping open the Chinese VC market to foreign investment in the early 2000s, said that successful China entries required careful consideration of intellectual property protection and piracy issues, especially in software.

He also acknowledged the need for prudence regarding ongoing geopolitical issues such as China-US trade tensions. "If you are flying, make sure that you know where to do an emergency landing. I always know who are the people I can count on if I get into trouble to rescue me," Tan said. "Make sure that you have risk management on your mind."

The comments came in a fireside chat with Wendell Brooks, president of Intel Capital, who had recently confirmed a $117 million investment across 14 artificial intelligence (AI) companies, including two China-based players. AI and its applications and development traction in China have been recurring themes at the conference in Phoenix, Arizona.

Intel Capital has staged its annual global summits in the US since 2000. The firm has invested some $2 billion in China since 1991, including around $1 billion in semiconductor maker Beijing UniSpreadtrum Technology. Its China-focused investment vehicles, including an RMB80 million ($12 million) angel fund and a $100 million smart devices fund, have backed at least nine IT companies in the past 12 months.

"Every time one of our global companies gets to $100-150 million of notional value, they want to decamp and move to Silicon Valley, and the reason I've historically gotten is there's access to software engineers or other talent in their space and it's where all the funding is," Brooks said. "I have the debate with my team all the time which is going to be the next hub of innovation outside the US, and we come to the conclusion pretty much every time that it's either going to be Tel Aviv or Beijing."

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• Topics
• Greater China
• GPs
• China
• Intel Capital
• Venture
• Walden International