U.S. government takes 10% stake in Intel

https://www.cnbc.com/2025/08/22/intel-goverment-equity-stake.html

by givemeethekeys • 11 months ago

610 713 11 months ago

Coffeewine• 11 months ago

I wonder if this means the US is going to come for Global Foundaires, TI and Micron to extract an equity stake too. Interesting times.

alephnerd9• 11 months ago

TI and Micron probably. Not sure about GloFlo - UAE's Mubadala has a very strong controlling stake in it.

lawlessone3• 11 months ago

My first thought, how many Trump people just front ran this?

nielsbot2• 11 months ago

You mean did insider trading?

lawlessone3• 11 months ago

yes :) ,i got the terms mixed up.

Thrymr2• 11 months ago

As of last week: https://bsky.app/profile/unusualwhales.bsky.social/post/3lwf...

alephnerd9• 11 months ago

Good. It's very much a "Heartbreaking: The Worst Person You Know Just Made a Great Point" situation.

If Taiwan's NDF has ownership share in TSMC and UMC, China's CICIIF in SMIC, Japan's Master Trust in a majority of enterprises, and Abu Dhabi's Mubadala in GlobalFoundries, then we should as well.

The recent (50ish years) aversion to Industrial Policy in America has been pigheaded and ideological to a certain extent. If we wish to build capacity domestically, especially in high capex and low margins industry, some amount of government support is needed.

Funds that are overwhelmingly sourced via private capital cannot take the same risks to build an ecosystem that a Soverign Development Fund can. This is what the Master Trust (Japan), NDF (Taiwan), and Temasek (Singapore) did to build their own domestic industries in semiconductors and REE processing - industries with high capex, high IP barriers, and low margins.

This now sets the precedent to develop at sovereign development fund.

If we did this with GM and Solyndra a decade+ ago we would have been in a better position to protect our automotive and renewable industry, but ofc the GOP of that era along with a portion of the DNC was not ready to take such a risk.

The CHIPS and IRA acts were steps in the right direction, but couldn't really take full advantage of the stick.

Edit: Surprised that a forum that largely supports single payer healthcare opposes sovereign development funds, even though they themselves could help enforce pricing in a less complex manner than that which the CMS does today.

At some point this is just reflexive hatred.

lazide3• 11 months ago

I don’t know, it sounds like the US gov’t just stole $11 bln from Intel shareholders - while intel is failing - while promising nothing?

alephnerd9• 11 months ago

It's a similar amount to the stake from the CHIPS act.

jimbob45• 11 months ago

Would you still be saying this if Intel wasn’t floundering as badly as it is today? There’s no equivalent push to take any level of control in AMD.

Also this appears to be in exchange for CHIPS funds (per the article). HN has universally supported equity in return for bailouts over the years.

alephnerd9• 11 months ago

Would you still be saying this if Intel wasn’t floundering as badly as it is today

Yes.

I've been a proponent of a Temasek style model for the US since my undergrad days. This would make it easier to commercialize grant funded IP instead of the mess that SBIR/STTR is today.

It was difficult for the Biden admin to do something similar, but at least the traditional norms have been shattered.

As I said above, it's very much a "broken clock is right twice" type of situation.

Also this appears to be in exchange for CHIPS funds (per the article). HN has universally supported equity in return for bailouts over the years.

Exactly!

And like I have said a couple of times on HN - I view the CHIPS and IRA as the carrot, and tariffs plus ownership stakes as the stick.

There is nothing wrong with with a public-private industrial policy. We ourselves used one until the 1980s with Reaganomics, as did our allies like Japan, Taiwan, Singapore, Israel, Ireland, and others.

bigyabai6• 11 months ago

The government support should have come in the form of a real competitor. Intel got this way because they had no competition - nobody thought a domestic EULV manufacturer would be an American prerogative in 20 years. All the customers for dense silicon were fine importing it from Taiwan.

Pouring more money into a proven dumpster fire won't put out the fire. This is the protectionist just-desert of refusing to regulate the top-dog competitors into a position where they're afraid to rest on their laurels. If we want an American lithography powerhouse, buying Intel stock rewards exactly the wrong incentives.

scarface_745• 11 months ago

So tell me your plan that would create a competitor for Intel from scratch that could be making decent chips in 5 years? 10 years?

selimthegrim2• 11 months ago

What’s your suggested remedy?

selimthegrim2• 11 months ago

What if the government demands they start paying dividends?

alephnerd9• 11 months ago

Ideally, a government or SDF holding is not a majority holding, but a controlling stake.

Generally, a SDF is expected to take decisions that help develop an ecosystem or market, and help act as a check against primarily profit-driven motives.

Assuming a stake is part of a well managed SDF similar to Temasek, Mubadala, or the Master Trust, then I'd tend to trust the decision being made.

That said, I also recognize that this administration is severely disorganized and amateur, so I wouldn't trust their choices. But, I do feel this sets a precedent to allow both the federal and state governments to build SDFs, especially in a post-Trump world.

For example, the CHIPS and IRA were able to be pushed thru by the Biden admin because of the trade norms the Trump 1 admin created and upended.

alephnerd9• 11 months ago

Also, good question - because as your rightfully pointed out, IME - deep down, I don't think dividends align with a net corporate benefit.

I should probably do the math, but excuse is I'm a VC - it just doesn't make sense from a long term perspective as I pitch to LPs about my thesis.

russellbeattie3• 11 months ago

"The United States paid nothing for these Shares, and the Shares are now valued at approximately $11 Billion Dollars,” President Trump wrote"

This wasn't any sort of investment, it was blackmail. No corporation in the country would voluntarily give up 10% of the company to the federal government - for free - unless overtly threatened. The Trump administration is hoping that by exerting control over Intel, it can begin dictating conditions to Intel's customers, thus the tech community at large.

I also assume that one of Trump's cronies will take a spot on the board or some other oversight role, and in the near future, Intel will enrich Trump in one way or another, such as stock, investments, insider information, etc.

Nothing about this is good for the U.S. or Intel. It's not a bailout or a sign of support, but a way for Trump to have power over the tech sector.

ocdtrekkie• 11 months ago

Arguably the alternative was the government just... not giving them the CHIPS Act money. (And there's certainly a point to be made that Trump altering the deal is... problematic.)

But I will say, I find the concept that when we invest public dollars in a private company, the public retains a stake appealing. I think about the strategic oil reserve, and how the government actually can make money by buying and selling oil to the open market. The idea that if we inject money into a company to help our domestic industries, that the government can sell it's stake back out at a later time is appealing.

(And again, to be clear, not a Republican or a Trumper here, and I assume in Trump fashion he will find some way to screw everyone involved and get paid himself personally... but the concept of the government acquiring a stake rather than just giving them a grant is on it's face... maybe not terrible?)

russellbeattie3• 11 months ago

We haven't invested any public dollars into Intel, we just took 10% of it.

jimt12342• 11 months ago

The Trump administration is hoping that by exerting control over Intel, it can begin dictating conditions to Intel's customers, thus the tech community at large.

This was my TDS-reaction as well. But, honestly, I feel like the "tech community" has moved on from Intel/x86 anyway. Or, at the very least, this move will accelerate that migration. ARM for the win!

coliveira5• 11 months ago

And now we see Trump taking over the US economy! He will not stop there, of course. If Intel folded, other companies of "national interest" will follow suit and Trump will appoint his friends to each of them.

nielsbot2• 11 months ago

Intel said that the U.S. government won’t have a board seat or other governance rights.

What rights does this refer to? Normal shareholder voting rights or something else?

eigart• 11 months ago

They will vote with the board

IvyMike• 11 months ago

Seizing the means of production!

karakot• 11 months ago

Da, Comrade!

pixelpoet• 11 months ago

The oligarchs resulting from the fall of Soviet Trumpistan are going to be the most obscenely rich people history has ever seen.

wedn3sday2• 11 months ago

Well, the current administration and the National Socialists do have some things in common.

naijaboiler• 11 months ago

i remember when this happened during an actual crisis, in 2008, republicans all over cried on the radio day after day, arguing that it's socialiasm.

But now, crickets!!

blackguardx• 11 months ago

They were still complaining about Solyndra over a decade later.

threemux• 11 months ago

The Republican party of 2008 bears little resemblance to the one of 2025, especially on economic issues. Many in the party have changed their views over the last decade+ on industrial policy and the libertarian wing of the party has very little influence now. It's really a striking shift.

What remains of the "old guard" is, in fact, loudly complaining about this move:

https://www.nationalreview.com/2025/08/the-government-should...

jimt12342• 11 months ago

Exactly! I know there's a lot of Trumpers/MAGAs on HN, so I'm sincerely asking them: How is this not the evil thing you guys constantly lecture us about (socialism!)?

NickC25• 11 months ago

It's not the evil thing because it's "their side" doing it.

miltonlost2• 11 months ago

Because they only lecture about socialism as a red herring. They only care about power and obtaining it. Fascists have no actual principles other than more power and hatred of others.

anigbrowl3• 11 months ago

Here's some emergency reading

https://theupheaval.substack.com/p/its-not-hypocrisy-youre-j...

impossiblefork6• 11 months ago

For me as a vague 1920s maybe-the-SocDems, I see this as vaguely positive. A return to pragmatism from market dogmatism.

I see some of the tariff stuff and the US protectionism sort of the same way, although I don't approve, since I think the US uniquely benefits from this kind of thing due to that the dollar is such a predominant reserve currency and since I think it's badly done and will backfire, tarring what in principle be sensible policies if carefully targeted with being Trumpist.

actionfromafar5• 11 months ago

This seems more vaguely 1930s maybe-some-other-ism.

anon2915• 11 months ago

I am a republican. I even voted for trump. I am categorically against this. In fact, he should be impeached for it, and I have already called my representative (a democrat) telling her she has my vote if she introduces articles of impeachment against him. This is a red line for me. My parents left a third world country to not have to deal with this shit.

marcosdumay2• 11 months ago

Everybody lives on their own personal reality nowadays, but for me the internet has been incredibly loud about it.

voxadam• 11 months ago

Intel press release:

https://newsroom.intel.com/corporate/intel-and-trump-adminis...

robocat• 11 months ago

So no shareholder vote required?

It is equivalent to a 10% dilution (shares issued for no extra cash).

lugu5• 11 months ago

How can this be any good for Intel? Why is the stock value bumping 6%?

parliament322• 11 months ago

No, the shares already existed, they were just held by Intel. According to their most recent 10-K, 10 billion shares of common stock are authorized, but only 4.33 billion were issued and outstanding.

eunos• 11 months ago

So Intel is an SOE now?

cuttothechase3• 11 months ago

Genuine question-

How does Govt picking winners and losers going to help?

Intel is no Too big to fail Bank. Why save Intel of all chip manufacturers? Wouldnt it be like 25 years too late, with Intel and its heydays !?

Would Govt now ensure parity by investing in "marquee" entities across different industrial domains?

jen20• 11 months ago

How does Govt picking winners and losers going to help?

By ensuring that the US retains at least the ability to manufacture second tier CPUs vs complete reliance on Asia? This doesn't seem unreasonable.

bigyabai6• 11 months ago

The US can't employ poverty-tier labor to enable competitive margins, though. American businesses and global trade partners already largely reject Intel's foundry services.

dpbriggs• 11 months ago

Achieving that doesn't need to take the form of a 10% stake in a flailing company.

fishgoesblub2• 11 months ago

I don't expect a good reason given the history of this Administration, but a reason in my mind to save Intel is there's only 3 license holders for x86 CPUs. Intel, AMD (American), and VIA (Taiwanese). A dead Intel leaves a single American company that is able to make x86 processors, and a monopoly for actually good x86 CPUs. But somehow I suspect there's no logical reason for this besides lining the pockets of those in the Administration.

kaladin-jasnah2• 11 months ago

What about Hygon?

kardianos• 11 months ago

What is missing is that Intel has US based foundries and US based talent.

craftkiller• 11 months ago

Why would the ISA matter to the government? I could see this being about Intel's physical manufacturing capabilities, but the ISA should be pretty irrelevant. Recompile what code you can, run the rest via qemu-user-static.

JustExAWS6• 11 months ago

While there are other good reasons to save Intel, if it went under, someone could still buy the license. I can’t imagine why anyone would want a license to x86 in 2025. It’s not like all of the companies designing custom chips are going to be falling over themselves to design use the x86 ISA.

nebula8804• 11 months ago

A dead Intel could open the door to have more then three license holders. Isn't Intel the reason there are only three license holders?

pizzly• 11 months ago

I hope this is not the reason. I think x86 is a deadend technology. ARM's energy superiority makes it a better choice. x86 only still being used due to legacy/backwards compatibility but thats changing. Apple moved completely away from x86. Theres more and more ARM based windows computers being sold. Theres no x86 chips in phones.

j4hdufd82• 11 months ago

Yeah why not fund a new foundry startup?

wmf4• 11 months ago

That's extremely risky, like 100 to 1.

koolba• 11 months ago

If you think getting a couple million dollars of funding and expecting to show profitability in a few years is hard, just wait till you try it with billions and 5+ years.

chneu4• 11 months ago

It would take a decade and hundreds of billions of dollars with no guarantee it would work.

It's a terrible idea

linguae• 11 months ago

The only charitable answer I could give is national security reasons for having domestic chip production, and even that could be accomplished in ways that don’t require the federal government having an ownership stake in Intel. For example, I don’t think the federal government has ownership stakes in Lockheed Martin and Northrop Grumman, despite those companies’ dependence on the military.

Spooky235• 11 months ago

There’s a legal precedent that’s no doubt being abused. The Lima tank factory and Watervliet arsenal, for example are owned by the US government.

turbo_wombat• 11 months ago

You are asking why save Intel of all chip manufacturers, and the answer is because there aren't any other major chip manufacturers in the US.

AMD no longer has a fab. TSMC dominates the global market and basically has no competition.

In the event that Taiwan is invaded, the US would suddenly have a huge problem getting access to any kind of high end chips, be they CPUs or GPUs. This would be a major problem economically and militarily for the US.

Some caveats: Due to the chip act, TSMC does now have fabs Arizona, though I'm not sure what their capacity is. TI, and some others building lower end components also have fabs I believe. For x86, high end ARM, and GPU's, virtually all of that is manufactured by TSMC right now, mostly in Taiwan.

internetter2• 11 months ago

TSMC does now have fabs Arizona, though I'm not sure what their capacity is.

180,000 wafers a year. Globally they do 17 million. They announced first profit yesterday.

SJC_Hacker4• 11 months ago

In the event that Taiwan is invaded, the EVERYONE would suddenly have a huge problem getting access to any kind of high end chips, be they CPUs or GPUs.

China would not takeover TSMC intact. Even if they did, they would not be able to operate it for quite some time (years), if ever.

Hikikomori2• 11 months ago

This government? Bribe them on the side.

Hikikomori2• 11 months ago

I take that back. It's the old one you bribe on the side, this one you can bribe in the open.

miohtama2• 11 months ago

There is only 1 winner and 1 loser: Intel.

It's the only chip manufacturer "left" in the US. The argument is national security: the US expects China to invade Taiwan and this will kill TSMC in the process.

Whether this will happen or not can be debated, but this is what the government expects.

ac29• 11 months ago

It's the only chip manufacturer "left" in the US

Global Foundries, Micron, and Texas Instruments all come to mind

Yoofie• 11 months ago

Texas Instruments and Microchip: Am I a joke to you?

pixelatedindex• 11 months ago

the US expects China to invade Taiwan and this will kill TSMC in the process.

Would it though? The TSMC foundries are pretty much in every continent. Are they just going to stop operating if this happens? Because that seems akin to killing a golden goose.

Also what is up with Global Foundries? I don’t hear a peep about them.

actionfromafar5• 11 months ago

And now China knows the US expects this and it also knows the US does not expect to stop China, so China knows that it can expect the US to do very little. It's game theory turtles all the way down...

Edit: I think it's a misconception that China cares much about fabs in Taiwan. It wants unification.

ecocentrik5• 11 months ago

If the argument was for protecting Intel, then the US government should be placing huge orders with Intel for solutions that will fund R&D and allow the company to regain its position as a foundry. They should be tapping into the defense budget. DARPA should be involved. This was an opportunity for petty extortion and a step towards socialism.

dedge• 11 months ago

Exactly. Expect to see some kind of additional intervention such as forcing a certain number of chips that currently go to TSMC to go to Intel.

gonzopancho2• 11 months ago

And the current administration is unlikely to help Taiwan in the event of said invasion.

onetimeusename• 11 months ago

This is my thought on it too. I don't think this is meant to be a political win so much as US intelligence views chip manufacturing extremely strategically. I also don't know about what will happen to TSMC. But the US has been pushing for US made GPUs as well. This goes back to Biden's admin as well.

https://www.tomshardware.com/tech-industry/us-govt-pushes-nv...

flamedoge• 11 months ago

so.. shouldn't US take stake in TSMC instead?

chiefalchemist2• 11 months ago

I see it different. The loser is the taxpayers. The loser is the market, which is less and less free. When there’s no incentive to run your company correctly… we get another company not run correctly.

coliveira5• 11 months ago

This is a sure giveaway that the US military depends on Intel. It is the only major chip producer that has fabs in the US, and it is also the creator of the x86 architecture. That would mean that without Intel the military would become dependent on chips from Chinese Taiwan.

robotnikman2• 11 months ago

Not just the military, but the majority of consumer devices as well.

With Intel maintained, if China invades Taiwan and takes TSMC the US will still be able to make usable processors. They won't be the latest and greatest like TSMC, but they will be good enough. Maybe not the most powerful or efficient, but still rather close.

My only worry is this will mean management will start resting on their laurels and things will just continue to deteriorate. Or maybe the government can convince them to get rid of the bad management and start thinking more long term and less about immediate profits.

anonfordays• 11 months ago

This is a sure giveaway that the US military depends on Intel.

"Giveaway?" This isn't some secret, everyone knows the military depends on x86 processors, and having a company that can produce them domestically is a national security concern.

Waterluvian2• 11 months ago

Free market capitalism is great until you’re about to be the big Loser. And then the big dog steps in and yells for time out.

I think if this was a domestic thing it would be all kinds of dumb and wrong. But as a US National Security thing, it makes sense if you’re of the mind that significant intervention is fine when it’s in your country’s best interest.

The next phase is watching the U.S. government keep Intel on a palliative drip of softball contracts and tax dollars. I guess there’s a fair argument that this form of bail out could help Intel thrive again… or at least secure a domestic supply of chips for natsec reasons?

TZubiri• 11 months ago

x86

tester7563• 11 months ago

Wouldnt it be like 25 years too late, with Intel and its heydays !?

wtf? what do you mean, they're like less than 1 year behind TSMC when it comes to leading node

georgeecollins5• 11 months ago

(disclosure Intel Shareholder) I don't think they are one year behind. I think it is more than one year and for a long time they have not been closing in.

kevin_thibedeau• 11 months ago

They supply components for the defense industry, where foreign production isn't a viable option. No one bank is more important than that. This is also why Micron is getting a free fab for strategic redundancy despite no clear reason why they would need 2x capacity after onshoring back to Boise.

etempleton4• 11 months ago

They are the only US company that can produce cutting edge chips now and realistically within the next 15+ years. It doesn’t matter that TSMC produces chips in the US. That is nice for the short term but doesn’t do much for the US in the long term if TSMC falls under China’s influence.

Intel is in the midst of a dramatic turnaround and huge shift in strategy. It might fail. But if they succeed it puts Intel and the US in a much stronger position in terms of technology and military leadership.

biophysboy• 11 months ago

It mattered for China to have Apple/Foxconn/etc assemble phones in China. By this same logic, won’t TSMC have more tacit knowledge to offer America than Intel, even if their independence is short-lived?

JustExAWS6• 11 months ago

What other US based chip manufacturers are there?

beefnugs• 11 months ago

Because Dump personally pictures being able to instruct all personal computers to "dont do woke"

The end result is more like all the rich people take their cash and jump off the top of the pyramid as it crumbles

SkyPuncher• 11 months ago

This isn't a generalizable problem. There just aren't many companies that would be in a comparable situation to Intel.

Intel is:

* Critical to national security

* An advanced, industry that's extremely hard to spin up

* Essentially, one of two companies in it's industry.

Very few other companies meet all of those criteria.

cuttothechase3• 11 months ago

What beats Boeing or Apple then so as to put Intel over the top of these guys?

acomjean• 11 months ago

All I can think here is the government forcing back doors

(like the failed Clipper chip) https://en.m.wikipedia.org/wiki/Clipper_chip

The thinking might be the government needs a local industry for security. Think submarine manufacturing. Not a huge private market for that, but best to keep local so the supply can’t be cut off.

Though usually the government isn’t the best stewards of companies. When I worked for a large government contractor someone joked “yesterday’s technology tomorrow”. Some of that is for reliability, but it wasn’t cutting edge in a lot of ways.

thisisit7• 11 months ago

Most of the answers are going to be national security. That is the reason used by third world countries to nationalise companies.

burnte• 11 months ago

US wants to maintain chip manufacturing presence and expertise within the borders, so saving everyone would achieve the goal but at a higher cost, so they're just focusing on the US ones in trouble.

reg_dunlop• 11 months ago

Forgive me...how is this different than taxes?

And wouldn't it be better to oh, I don't know, enforce the standard corporate tax rate?

wmf4• 11 months ago

This is a bailout; it's the opposite of taxes.

mikepurvis• 11 months ago

Isn't it the opposite of a bailout, given that the US gov't is seizing an ownership stake retroactively based on past grants/bailouts but giving no new money at this time?

roxolotl• 11 months ago

Most of the money has already been given:

The government’s equity stake will be funded by the remaining $5.7 billion in grants previously awarded, but not yet paid, to Intel under the U.S. CHIPS and Science Act and $3.2 billion awarded to the company as part of the Secure Enclave program. Intel will continue to deliver on its Secure Enclave obligations and reaffirmed its commitment to delivering trusted and secure semiconductors to the U.S. Department of Defense. The $8.9 billion investment is in addition to the $2.2 billion in CHIPS grants Intel has received to date, making for a total investment of $11.1 billion.

So it kinda is something weird? It's not really a pure bail out, the Chips act already did that, and it's also not really a tax because they aren't going to get money out unless there's dividends. It's more like a power play which makes sense given that Trump is uncomfortable without anyone getting anything for nothing.

Thrymr2• 11 months ago

It's not like taxes because they are just making up the rules as they go along.

GardenLetter27• 11 months ago

Corruption is worse than taxes, because it's unfair. Now the government has an incentive to hurt AMD and free competition.

The distorts incentives and destroys the free market.

shusaku2• 11 months ago

I look forward to the people who always claim “taxation is theft” to comment on a single man deciding to strong arm a company into giving 10% to the government.

shrubble• 11 months ago

I’m reminded that Chrysler took a big loan from the US government in 1979, $1.5 billion which today is equivalent to about $5.9 billion USD according to the inflation calculator I found.

est2• 11 months ago

FIAT is somewhat state-owned anyway.

wmf4• 11 months ago

This is worse than I expected. They're apparently putting in no new money and retroactively demanding stock in exchange for grants that were already awarded. If Intel can't afford to build 14A and we're putting in no net new money... then Intel still can't afford 14A? Unless they were lying.

moolcool• 11 months ago

Maybe it’s more about affording 641A

abeppu• 11 months ago

... what would a chip version of 641A even look like?

If it involves (a) identifying / filtering stuff they want to spy on (b) sending it back to one of the intelligence agencies, it seems like both would be hard to do well and secretly ... right?

moogly• 11 months ago

It's just cronyism and bribes. Nothing more to it. From "he must go" to "Intel is so great that we demand a 10% stake” in a week. Mussolini-style.

lovich• 11 months ago

Or they just devalued all of the current stock holders. Intel needed the capital, not Intel stock

etempleton4• 11 months ago

There werestrings attached to the CHIPs act money. Not saying this is some great deal. It isn't. It is a deal made from a place of necessity and weakness for Intel, but it gives them the cash infusion they need in the short term. Right now Intel's only goal is to have enough money to get 14a off the ground and attract at least one large external customer to prove their capabilities.

notepad0x903• 11 months ago

I despite/abhor this administration and their politics, but this is a good move.

There should be more privatization where national interests are involved.

Instead of the ACA for example,the government could have taken a 51% stake in health insurers (forget subsidizing them, own them!) and we the voters would elect politicians to oversee health insurance instead of hoping and trusting CEOs.

So many problems are caused by companies chasing short-term shareholder satisfaction. If the government is a significant shareholder, then guess who they'll try to make happy?

The sheer threat of the government buying a controlling interest and running your company might make some companies behave in the interests of the public more. Especially, if the government is also engaging in policy to harm the company's revenue before buying stakes in it.

I'm not saying the US should be a full-on communist or socialist economy, nothing like that. This is capitalism. We the people get to use or tax dollars to our benefit. Think about it, the US sells bonds right? what if it paid for them by investing in company stocks and derivatives? that's revenue right?

The whole pearl-clutching over ideological extremes doesn't serve the public or the economy's interest.

Some privatization is good, none is great if everyone was decent and honorable. but in this society, moderate privatization where there is potential benefit to the public and national security makes sense.

Companies with government investment should also be prohibited from making political donations, so any company that is trying to sway elections faces the threat of the next administration buying stakes in them to prevent that behavior.

This could be the missing 5th estate that can make democracy last.

wedn3sday2• 11 months ago

I swear Im not trying to be glib or dismissive, but I honestly think you dont know what "privatization" means, this is the exact opposite.

tyg133• 11 months ago

Exactly. This amounts to a partial nationalization of Intel.

foobarian• 11 months ago

Maybe they mean "privately owned by the government". Which I guess is usually called nationalization

notepad0x903• 11 months ago

No offense taken, my understanding of the term could was wrong. I hope it doesn't take anything away from my argument though. I think I wanted to use the term "deprivatization" instead, I only remember this topic distantly from reading about communism and economics.

ecocentrik5• 11 months ago

I agree. He should take control of Tesla, OpenAI, Palantir and Facebook next. Then privatize some of the leading quantum computing companies. Why do we even need venture capital if we can just build out an Office of Strategic Investment and control everything from the federal government. \s

notepad0x903• 11 months ago

Slippery-slope fallacy. The money to buy shares has to come from somewhere and the power of the purse is with House of reps. Someone like Trump can (and is-per this post) take stakes in random companies, but that's our democracy. You wouldn't say "bomb canada, france, england and norway" because the military bombed one country right? You make sure congress checks and balances that power.

If the government takes over those companies and they don't do well, it means lost jobs which means lost elections too. There's a risk calculus to be had.

The current policy of never intervening or taking ownership in companies.. unless they are "too big to fail and start failing" only benefits the companies.

poslathian2• 11 months ago

It’s super debatable whether or not DARPA has done more for creating enterprise value in the US tech sector than sand hill.

At the least, without darpa the whole Bay Area machine would not exist today, so it’s at least necessary if not sufficient.

Not just darpa but nih, nsf, doe, onr, arl, nasa, and the national labs are definitively necessary causal dependencies on of every company and industry driving US national pride and all of the most valuable companies.

Even if the firm never takes a grant, their talent, supply chain, and component pipelines all depend on these grantor agencies thoughtfully allocating taxpayer capital at the national level.

sciencesama• 11 months ago

How an anti communist govt slowly is adapting communistic ideas !!

MyOutfitIsVague2• 11 months ago

the government made an $8.9 billion investment in Intel common stock, purchasing 433.3 million shares at a price of $20.47 per share, giving it a 10% stake in the company
The United States paid nothing for these Shares, and the Shares are now valued at approximately $11 Billion Dollars

I don't understand. Can somebody explain to me how the government made an investement, bought shares, but paid nothing?

heyheyhey• 11 months ago

I think a better rephrasing is "government is giving $8.9B from the CHIPS act in exchange for a 10% stake in the company"

tyg133• 11 months ago

Depends on who you ask. Trump himself seems to think the US is getting 10% for free. I think that's a fair assessment given that these grants were already supposed to be paid out to Intel, without any kind of equity stake promised.

Worth noting that Intel is the only company that had these kinds of shenanigans pulled with their grant. Samsung, TSMC, Micron and others were granted similar funds without any kind of withholding or demands for equity from the federal government.

cvoss• 11 months ago

The answer is in the paragraph in between the two you quoted from. The money for the purchase has already been appropriated by Congress and awarded to Intel. The awards didn't previously have this giant string attached where Intel gives stock in return. But now they do.

And it makes sense that Intel is spinning it as a generous investment from the gov't, but the gov't is spinning it as a free gift from Intel. Neither account really paints the full picture, but each one paints themselves as coming out ahead.

MyOutfitIsVague2• 11 months ago

I had seen that, but I don't consider that "paying nothing". That's paying something. I'm also confused how it's a "grant" if it's completely transactional. That's not a string attached, that's just a purchase. So I guess it's just political spin on all sides.

reactordev• 11 months ago

Boardroom politics...

Everyone saves face.

m4rtink• 11 months ago

Isn't that pretty bad, Darth Vader style changing of previously agreed on deals ?

Not sure how anyone can believe anything that was agreed will hold in such an environment. :P

skybrian• 11 months ago

What does Intel get? I suppose it ensures that the grants aren't cancelled.

wahern2• 11 months ago

Can somebody explain to me how the government made an investement, bought shares, but paid nothing?

Extortion.

Recent Supreme Court decisions have permitted the government to unilaterally cancel disbursements, even in flagrant violation of the plain text of law, impervious to preliminary injunctions, and then put up procedural hurdles to significantly increase the cost of reaching a final judgment in favor of the plaintiff. See, e.g., the most recent decisions issued this week in National Institutes of Health v. American Public Health Assn.: https://www.supremecourt.gov/opinions/relatingtoorders/24

So presumably the administration's deal was, give us what we ask for and you'll get the money Congress awarded, or don't and wait 1-2 years for any case to wind its way through the courts.

tobias32• 11 months ago

If someone from the Mafia comes to you and asks for a 10% share of your restaurant you better say yes.

rcap5• 11 months ago

Socializing a corporate venture with peace time debt seems counter to the ideals of free market capitalism. Even the takeover of "government motors" (GM) during the Great Recession left many concerned about government overreach. Boeing killed people with a bad product, and they only faced a fine without direct equity takeover.

CoastalCoder2• 11 months ago

Yes, but in this case the restaurant was already empty of customers on most evenings.

ecocentrik5• 11 months ago

When you're really familiar with extortion, everything looks like an opportunity for extortion.

mkoubaa• 11 months ago

They're nationalizing it

usernomdeguerre• 11 months ago

The clearer picture comes from Reuters[0], as usual:

The government will purchase the 433.3 million shares with funding from the $5.7 billion in unpaid CHIPS Act grants and $3.2 billion awarded to Intel for the Secure Enclave program.

So the same playbook hes taken across the board: cast aspersions on leadership, withhold duly appropriated money in contravention to the law. Rinse repeat.

[0] https://www.reuters.com/business/trump-says-intel-has-agreed...

miohtama2• 11 months ago

Discussion from yesterday about Intel's and Trump's woes

https://news.ycombinator.com/item?id=44978356

softwaredoug4• 11 months ago

I’m pretty sure that’s socialism

impossiblefork6• 11 months ago

Socialism would be worker ownership.

This is simply state ownership of what's seen as a strategic business. It's an abandonment of market dogmatism, but not a step towards any of the many ideologies or positions where markets have a smaller role.

lawlessone3• 11 months ago

I think the phrase i heard before is State Capitalism. But i could be wrong

softwaredoug4• 11 months ago

So by that logic, state provided healthcare is not socialism. But a labor union providing health insurance is socialism.

Can we get some of that state owned health care :-p

meepmorp• 11 months ago

Unless it comes from the Commie region of Asia, it's just sparkling state capitalism.

micromacrofoot• 11 months ago

nationalism

dmitrygr• 11 months ago

Why is this a surprise?

Who do you expect to design and make chips for national security-level programs in the future wars when Taiwan is a deep crater?

Every serious nation state has an arch design house and a fab. It need not be cutting edge (most militry stuff is a few gens old), but it needs to exist. Russia has Elbrus. China has Looonsoon and SMIC. Europe has ARM but is a bit behind here fab-wise. However, STMicro does have fabs in europe.

This is just securing access and control of national-security level resources.

tyg133• 11 months ago

The surprise is the federal government acting like an unfair negotiator, substantially altering the deal after it had already been struck. Equity in return for investment grants was never a part of CHIPS, and was only made part of it by Trump who seems to have originally wanted to kill the deal because it wasn't made by him.

impossiblefork6• 11 months ago

Taiwan.

The thing is, even though the US is trying to create an alternative for itself, once Taiwan is in danger, this would for the EU mean a total US microchip monopoly, so radical action becomes necessary.

If I were a political leader in the EU I would consider nuclear weapons sharing with Taiwan if that happened.

bilsbie• 11 months ago

This sounds bad. Can someone steelman this for me so I can understand the good?

edot3• 11 months ago

If you’re going to give taxpayer money to a for-profit company, taxpayers should receive a share of the company in return. I generally don’t like 90% of the policies we’ve got going on right now, but I actually feel okay about this one.

ecocentrik5• 11 months ago

In the rare conditions where this has been necessary in the past, US companies have been given clear terms for regaining control of those shares. I'm not seeing any buyback provisions.

righthand4• 11 months ago

This is ignoring the original agreement of profit-sharing with the government as was in Biden’s original plan. Feeling “okay” or not “okay” is irrelevant until we know how well Intel does in the next decade and calculate the cost against the profit sharing agreement.

zmmmmm• 11 months ago

taxpayers should receive a share of the company in return

This is seductive logic but I think the opposite is true. The only time government should be giving money to a for-profit company is where a dividend in value is available that is not related to having a stake in the company.

Think about it this way: if the value transferred is fully realised as shares in the company then the government actually transferred nothing to the company. It was a pure commercial transaction and there is no obligation on the company to do anything different than it would have done commercially otherwise. Except the outcome is that the government is now entangled in private industry which is generally bad because it creates strong conflicts of interest in terms of policy and regulatory powers wielded by the government. All the dividend to taxpayers comes from the part that is not realised commercially.

coldpie• 11 months ago

Doesn't this create an incentive for the US Gov't to boost Intel and harm their competitors? That seems not great to me from a competition & healthy markets standpoint.

heavyset_go• 11 months ago

Smart bomb supply chain secured.

pk-protect-ai• 11 months ago

Atlas Shrugged ...

BSOhealth• 11 months ago

Intel as a store of value?

thehoagie• 11 months ago

Of the total, $5.7 billion of the government funds will come from grants under the CHIPS Act that had been awarded

Also > "Your CHIPs Act is a horrible, horrible thing...You should get rid of the CHIP act and whatever's left over Mr. Speaker" - Donald Trump

Fast forward to today: > "This is a great Deal for America and, also, a great Deal for INTEL." - Donald Trump

Reason077• 11 months ago

Comrades,

Starting today, under the government’s guidance, Intel shall serve the needs of the needs of the nation - not the whims of oligarchs.

Liberated from wasteful and destructive capitalistic competition, Intel’s revolutionary “people’s processors” (soon to be developed) will ensure that the world’s most advanced AI chips are made in America. And priced within the reach of every US worker.

Viva la revolution! Viva Intel!

nickhodge• 11 months ago

Here comes the nationalization phase of fascism. Well done, freedom lovers. You voted in exactly what you fear most.

moskie• 11 months ago

They never feared it, they always wanted it, just with someone like Trump calling the shots. Every accusation is a confession, etc.

webninja6• 11 months ago

How exactly are countries like Norway doing with their Sovereign Wealth Funds?

Does it provide its citizens with benefits?

sobiolite• 11 months ago

Ironic, Western politicians thought opening up to trade with China would lead to it adopting a Western model of government. Instead it's lead to the USA adopting the Chinese one.

slashnode• 11 months ago

Ha! Too perfect

glimshe• 11 months ago

The promiscuous relation between government and tech is as old as Silicon Valley. I'm fact, it created Silicon Valley. It started when people in China were still building backyard furnaces.

bigyabai6• 11 months ago

Who ordered the Chinese people to build furnaces in their backyard?

yieldcrv2• 11 months ago

We even have no assurance of keeping private property via civil asset forfeiture!

Private ownership was the adults main point of pride to distinguish from the Chinese when I was growing up.

And now the Chinese private property frameworks are closer to ours and ours are closer to theirs.

nine_k• 11 months ago

Civil forfeiture existed since 1660s, and was used initially to confiscate smugglers' vessels. Then it was dug out during Prohibition, and turned toxic in 1980s when the agencies doing the forfeiture (e.g. police) were allowed to keep the confiscated property. Ideally it should be used for restitution (e.g. to victims of fraud), but...

I suspect you were growing up when this was in full swing already.

Buttons8402• 11 months ago

[flagged]

robotnikman2• 11 months ago

It somewhat makes sense in terms of industries which are deemed strategically important. Intel needs to start thinking long term instead of short term profits.

astrange• 11 months ago

The CHIPS act founded the National Semiconductor Technology Center for this purpose. As for Intel, they aren't even achieving short term profits…

christina97• 11 months ago

OP didn’t make a value judgement about which model is better or makes more sense!

petemill• 11 months ago

Intel needs to start thinking long term instead of short term profits

Which is what the last CEO was in the middle of doing and he got fired just recently because they couldn't stomach it

bobthepanda• 11 months ago

Intel has had a couple years of saying they were going into a more long term vision and failing, and it’s unclear how direct government ownership will make them get better at execution

JackYoustra4• 11 months ago

if someone believes this, they should buy intel and just do it outright! But no one does because it's not as easy as "just think long term" - if it were, berkshire has the liquid money to buy intel several times over.

cyanydeez• 11 months ago

No, I think you're missing the wag-the-dog portion of this event.

DarkNova6• 11 months ago

Kinda. But I think the current Chinese model is actually much closer to how the USA used to work when there was competition with the USSR. Closer than the US of today compared to the 70s and 80s.

torginus3• 11 months ago

The current Chinese model's basically you have fully publicly traded companies, companies who are either minority or majority owned by a certain provincial government and ones who are either minority or majority owned by the central government (although this is surprisingly rare outside of key areas like telco/banking)

JackYoustra4• 11 months ago

The US never owned a brewer, an airline, the major defense giants, etc.

Tagbert• 11 months ago

[flagged]

FrustratedMonky• 11 months ago

We're living in the time of irony. Up is Down, Left is Right, Right is Left. Republicans have become Socialist. Free Speech absolutist now against Free Speech.

andsoitis5• 11 months ago

Western governments have taken a stake in, nationalised, or owned / operated corporations for a very long time!

Some examples: VOC, BBC, national airlines, etc.

List across countries: https://en.wikipedia.org/wiki/List_of_government-owned_compa...

US specific: https://en.wikipedia.org/wiki/State-owned_enterprises_of_the...

legitster• 11 months ago

Most of these were done under duress or specifically for public goods (BBC, for example).

Taking an ownership stake in broad daylight for political favors is very much unprecedented in the modern economy.

JackYoustra4• 11 months ago

Calling VOC an offshoot of a western government with any modern relevance is a HUMONGOUS stretch

concinds• 11 months ago

It’s not “adopting” the Chinese model yet, so much as incoherently copying bits and pieces. If you want to run effective industrial policy you need sufficient state capacity and an army of technocrats who are experts on industrial policy. Trump’s second term performance gives no hope on both fronts.

torginus3• 11 months ago

Yeah, this so weird coming from the US. The US government has a history of writing no-strings-attached blank cheques to people/companies just so avoid the stigma of government control in public companies.

I wonder how the markets will react, will stocks go up because people will assume Intel's going to be a government mandated champion or will they go down because of the negative connotations government control brings?

JackYoustra4• 11 months ago

Name one literal no-strings-attached blank cheque to a large company in the last 20 years

pryce• 11 months ago

That's very cute quip but I notice that it places the blame on 'trade with China' for an alarming problem that is in fact entirely the doing of US voters expressing their values (or the lack of them) in fair elections.

A more interesting question is whether that voterbase's idea of what they were voting for does or doesn't line up with what they got.

jibal• 11 months ago

post hoc ergo propter hoc fallacy

(Also, pet peeve: "it's lead" should be "it's led".)

signatoremo• 11 months ago

You need to study history. US government is no stranger in getting stakes in businesses. Did you already forget the Great Depression?

https://www.investopedia.com/articles/economics/08/governmen...

bink4• 11 months ago

We aren't anywhere close to being in a depression though. What extraordinary situation requires the government to take a stake in a public company and under what conditions will this position be liquidated?

Barrin92• 11 months ago

The Chinese have been surprisingly willing to let companies and sectors die even at the expense of growth (see real estate), I think it's honestly too charitable to compare the US to China, which has at least some degree of technocratic governance, the US went straight for something out of the Tropico franchise

fancyfredbot2• 11 months ago

Did Lip Bu Tan initially try to say no to this? You'd kind of expect him to say no. Is that why Trump tried to oust him? Is Trump trying to oust him the reason Intel are now accepting this?

BeetleB11• 11 months ago

You'd kind of expect him to say no.

There was no guarantee Intel would get the rest of the CHIPS money they were granted - even the Biden administration kept holding it back (after officially awarding it to them) - as there were doubts Intel could deliver.

I also wonder if some deal was made around 14A. Tan said he would not develop it without commitments from customers, because sales from Intel CPUs wouldn't justify the cost. This may be a way to ease that pressure and give Intel another chance even without serious customer commitment.

hangonhn2• 11 months ago

The investment from Softbank is interesting because ARM is also a portfolio company of theirs. ARM has said they want to make their own chips now so Intel might be a good candidate for that.

belter2• 11 months ago

I give you 3 months before the US government takes 10% of Google, Microsoft, Amazon/AWS, Nvidia, AMD and Apple.

BeetleB11• 11 months ago

Those companies are not fighting for survival.

coliveira5• 11 months ago

The gov already took a big part of Nvidia profits in China.

belter2• 11 months ago

Survival is not the issue, it is about control. Today 10% Intel stake (non-voting, bought with already-promised CHIPS funds) puts the state on the cap table, and the 15% skim on Nvidia and AMD China sales swaps export licenses for tribute. The HN usual knee-jerk downvotes on anything about Trump admin criticism, just help normalize it.

coliveira5• 11 months ago

For Nvidia this is already happening. They're taking a chunk of the profits of Nvidia operations in China. The Chinese have been prescient when stopped any Intel and Nvidia chips in government and strategic areas of China.

Waterluvian2• 11 months ago

This feels like another signal that the U.S. as an economic superpower is transitioning into something else.

I guess this is kind of like an auto or bank bailout, but is there something to bail out, or are they just gaining ownership of a doomed (in the classical sense) corporation?

EasyMark• 11 months ago

hopefully it's only for 3 more years. One aspect of fascism is government politicians taking over businesses for their own power and monetary enrichment. I'm not sure how this makes Trump richer, but I'm sure there is some angle to it, there always is.

fancyfredbot2• 11 months ago

I am expecting shareholders to be very upset. If, as Matt Levine likes to say, everything is securities fraud then this is going to court one way or another.

lbrito• 11 months ago

Is the US going to sanction Intel for being a SOE now?

hn_throwaway_99• 11 months ago

Ahh, yes, conservatives please lecture me about the utopia of the free market and how those evil socialists that take control of the means of production just screw it all up.

Number 6934 on my list of "every accusation is just projection".

righthand4• 11 months ago

Trying to ignore the politicking on this so it can be clear on what exactly is “happening”.

As far as I understand, all Trump did was alter Biden admin’s original plan. Trump swapped a 10% stake in Intel for Biden’s profit sharing for participating in the grants[0] (anyone who participates in the CHIPS Act gets this deal currently, I guess Intel is renegotiating). Not necessarily better or worse because Intel is a long ways away from any sort of gain that would make a difference.

If you feel conflicted to think this is a good or bad move, you’re right where Trump wants you. Sit down and do the napkin math, you may find the deal irrelevant or numbers similar. In the end we won’t know for a decade the result. The move is meaningless financially but generates headlines and doesn’t do anything to advance the actual foundries.

It’s almost distracting…

[0] “Biden to require chips companies winning subsidies to share excess profits“ >> https://www.reuters.com/technology/us-require-companies-winn...

ejstronge• 11 months ago

First, this is different because this was not what was agreed when Intel sought the grant. So I reserve the right to see as ‘bad’ a coercive action.

Second, from your article:

‘ Commerce expects "upside sharing will only be material in instances where the project significantly exceeds its projected cash flows or returns, and will not exceed 75% of the recipient’s direct funding award." 'NOT A FREE HANDOUT'

Democratic Senator Jack Reed praised the profit sharing plan, saying chips funding is "not a free handout for multi-billion dollar tech companies.... There is no downside for companies that participate because they only have to share a portion of future profits if they do exceedingly well."’

Clearly, there was a cap on repayments, but there is not one on giving away equity

llllm4• 11 months ago

I don’t think people are conflicted over the math. The nature of this, the manner in which it went down, and the implications for the future are what people seem to care much more about.

banku_brougham• 11 months ago

[Ex Post Facto Clause, US Constitution](https://www.congress.gov/crs-product/IF11293). Oops, I thought it was so obviously going to be done away with in the courts, but in 1912 the Supreme Court ruled that it applies only to criminal punishments.

They always getcha with the fine print.

1980phipsi• 11 months ago

The Supreme Court’s standing doctrine is also weird. If the board of directors approves it, then would the shareholders even be able to sue?

chiph• 11 months ago

Looks like they will get common shares (not preferred). Could Intel create a new share class for this investment (with different voting rights)? Does 10% give the government a controlling interest?

Buttons8402• 11 months ago

So, this happened just because one man (you know the one) decided it should happen? No vote or anything?

lysace2• 11 months ago

That is my understanding. The US king ”made a deal” with Intel.

stego-tech• 11 months ago

Capitalism for profits, socialism for losses. I’m sick of seeing this sort of behavior pan out time and time again, though I’m hardly surprised by it at this point.

Speaking of things that wouldn’t surprise me, if Intel can’t manage an about-face in the next three to six years I fully expect them to become a Nationalized enterprise if only to preserve fabrication and chip design capabilities domestically. Same with Boeing given their less-than-stellar track record of late.

The current conflict is over domestic manufacturing capabilities. That’s where it will continue to rage until and unless full-fledged war breaks out. It doesn’t matter how many chips are designed domestically if all production capacity is in Asia within China’s sphere of influence. Intel is a major outlier for chips, as is Boeing for aerospace.

parineum2• 11 months ago

Capitalism for profits, socialism for losses. I’m sick of seeing this sort of behavior pan out time and time again, though I’m hardly surprised by it at this point

I'm not sure how this applies.

The US government just gained a 10% stake for nothing (that wasn't already given). Effectively going from the scenario you are painting to now taking a part of the profit as well.

I guess you were surprised after all!

Nemo_bis2• 11 months ago

The whole point of equity is that it can go to zero. Profit sharing means that the government had an upside (if Intel became profitable) and no downside. Now, if Intel loses money or goes bankrupt, 10 % of those losses automatically get socialised.

rvz• 11 months ago

Yet another bailout from the US government as accurately predicted. [0]

[0] https://news.ycombinator.com/item?id=44676641

NomDePlum• 11 months ago

Ironic that Trump looks to be succeeding in killing both Democracy and Capitalism, which rightly or wrongly are seen as it's greatest strengths.

If they go what does it leave the US with that's any different from any other country?

esalman• 11 months ago

For a party who talks constantly about freedom, this administration is sure doing a lot to encroach on said freedom, of both individuals and corporations.

shortrounddev2• 11 months ago

I've lived long enough to see the Republicans become the socialist party

actionfromafar5• 11 months ago

It's also pretty nationalist.

hbarka• 11 months ago

Shakedown list: Nvidia 15% of revenue AMD 15% of revenue Intel 10% of capital

Who else is next?

sigwinch2• 11 months ago

Rare earth miner MP Materials back on July 10. Next feels like TikTok or Fox News.

giobox• 11 months ago

A deal for 15 percent of revenues of specific AMD and NVidia part sales in China != 15 percent of all their revenues, not even close.

aabhay• 11 months ago

Demanding 15% of H20, causing China to retaliate and ban it, causing Nvidia to halt production.

In terms of net effect, it’s atrocious regardless.

colechristensen2• 11 months ago

I'm not mad about a corporate tax on semiconductors sold to an adversary and agree that a tax is better than a ban on those sales.

favflam• 11 months ago

Just to add:

what about the part where a single person is dictating taxes on American companies? That does not seem to phase that many people in the tech space...

And what leverage did the administration illegally (without Congressional authorization) apply to get this deal?

At least when the Bush admin did the first part of the financial bailout in 2008, they had Congressional authorization (a bill was passed).

thisisit7• 11 months ago

With time military companies need to pay their allegiance money so that they can break sanctions and oh national security. Some will approve because of the same reasons as Nvidia deal, who leaves that money on the table?

tombert• 11 months ago

Any reason to think that Trump didn't just buy a bunch of options before demanding this?

btbuildem• 11 months ago

The hammer is right here, now where did I put that sickle?

Zigurd• 11 months ago

Unless the descriptions of the deal I've seen are wrong, this seems random and pointless. No new money. A lot of the support for Intel foundry, and a lot of the people in that are gone now. So what's the national strategic interest in Intel? Pat Gelsinger must be happy he didn't stick around for this shitshow.

jjcm• 11 months ago

In general I would rather the government take a stake in corporations they're bailing out. I think the "too big to fail" bailouts in the past should have come with more of a cost for the business, so on one hand I'm glad this is finally happening.

On the other hand, I wish it were a more formalized process rather than this politicized "our president made a deal to save america!" / "Intel is back and the government is investing BUY INTEL SHARES" media event. These things should follow a strict set of rules and processes so investors and companies know what to expect. These kind of deals should be boring, not a media event.

actionfromafar5• 11 months ago

But that wouldn't give great ratings.

sergiomattei• 11 months ago

What bothers me is the double standard.

When the public asks for fully publicly-owned railways, universal healthcare, or any basic social safety assurances—“socialism”.

When a megacorporation struggles, immediately to the rescue.

hopelite• 11 months ago

It’s not a double standard, you just don’t understand the standard.

foxglacier4• 11 months ago

Bailouts aren't following some rules of fairness, they're for specific reasons like preventing greater economic problems (2008) or national security (probably Intel). You might disagree that those are the best ways to address those risks but that's why we elect the government to make those decisions and act on them instead of letting the country collapse - which is arguably more important than social services which won't really matter if there's no money to fund them or the country has been taken over by some hostile enemy.

ivewonyoung7• 11 months ago

One big difference is management control. People feel that government administered services tend to have poor management and citizen services more often than not. One big example is the DMV since almost every has experience dealing with it, long queue times are almost universal because no one gives a crap and it's very hard to fire a government employee. Or the passport issuance, or applying for permits. Or unemployment benefits, the list goes on and on.

Imagine if the DMV and passport services had even the possibility of competition like a private company has. You bet all of a sudden the service would get much faster and better and with fewer mistakes and red tape with the same or fewer number of employees. Or someone would set up a competitor and imagine how many people would even pay extra just to not waste several hours of their time.

It's tax payer money so there is a lot more waste than even at big private companies. For example, the costs to just administer and operate the social security administration(not including any money paid out to recipients) is $15 billion dollars with a big B. There is no incentive for anyone to save the tax payer any money and there would be a huge pushback from govt contractors, unions and employeees. See how much hate DOGE gets for even proposing cuts or higher efficiencies.

Any large IT project in the government in almost any country and at any goverment costs huge amounts while not returning much value if any. Look at the state and costs of local metro stations and trains in almost any city.

holmesworcester• 11 months ago

I think I agree overall, but "these kind of deals should be boring, not a media event" make me doubt that position, because "deal becomes a media event" seems so eventually-inevitable given how democracy works.

ch4s32• 11 months ago

I’d really rather we didn’t bail out these companies at all. It clearly creates moral hazard and makes it hard for better run companies to enter markets.

JustExAWS6• 11 months ago

Chip manufacturing is too important for the US. We can’t be completely dependent on Taiwan. Nothing against Taiwan, it’s one attack away from being obliterated by China.

No company is going to come out of someone’s garage and build a chip fab.

xyst• 11 months ago

Why is this so hard for people to understand? Intel for years had a massive lead in the market. Instead of investing in the business the clevel suite instead opted for idiotic stock buybacks.

The only good news is that C-level suite can continue to do the same shit over and over again.

bcrosby952• 11 months ago

If shareholders are losing ownership it's less a pure bailout and more a strategic investment and/or takeover. It also potentially lets the average taxpayer benefit rather than just those its directly propping up.

bongodongobob4• 11 months ago

Well as much as you don't like it, companies this big failing is terrible for the economy and in this case, national security to a degree. I'm of the thinking that when your company gets to a certain size we'd be well off nationalizing. Apple has more money than some nation states. Something that huge has the potential to affect global politics. There's lots of other reasons too, but this isn't like letting the corner store fail. The repercussions are huge. If we're going to bail out, the people should own some of it.

user____name• 11 months ago

I see two objections to this: The collateral damage to the surrounding economy (well ran companies might be dependent on Intel) and the loss of strategically important institutions and knowledge, especially in markets with a high barrier to entry. So I think bailing out can be justified, even if it is a clear moral hazard. The better solution I think is to prevent markets from becoming too oligopolistic and firms from becoming too big to fail. But this would require a government who isn't afraid of taking anti-trust measures to maintain market competition, but the US has been moving away from that model for decades.

tw042• 11 months ago

While that argument makes sense from a purely philosophical perspective, it doesn’t hold water in the reality of this situation.

Nobody is entering the chip making business and growing to a size and scale to compete with Intel in 2025. If they collapse tomorrow there aren’t going to be startups filling in the gaps, there’s just going to be massive shortages of chips and chaos.

SergeAx2• 11 months ago

Intel is the number one chip contractor for the US military. There's no scenario today where the US government allows Intel to go down.

FollowingTheDao• 11 months ago

I agree. In fact, I think the government should own all utilities like they do in more socialist countries. It gets rid of price gouging, and the stabilizes the market in things that are necessary for human life.

The natural resources of the country should belong to all of us. Not just a select few.

JustExAWS6• 11 months ago

Utilities are already strictly regulated by cities including prices. There is no price gouging when it comes to utilities.

dgb232• 11 months ago

Fossil fuels come to mind.

webninja6• 11 months ago

I visited a South American country where the water utility was recently sold to a private corporation. The home I briefly visited had a large water barrel inside because the water now shut off for many hours of the day, including the hours I was visiting.

radium3d• 11 months ago

I think it's a good choice for Intel as they are one of the very few who own fabs and fabs are extremely valuable pieces of equipment. Just because of 3 consecutive annual CPU "bugs" in essence, they should not shut down forever. Try try again.

charliea03• 11 months ago

The government should avoid bailing out big, uncompetitive corporations. If the government is acting as lender-of-last-resort in some crisis, then it should demand senior debt to that it gets paid back before any shareholder.

sethev• 11 months ago

The government took 79.9% of AIG in that bailout - which was the biggest of the "too big to fail" bailouts from the past. People seem to forget that the owners of these companies that were bailed out got almost completely wiped out and instead focus on management compensation (which famously stayed high).

georgeecollins5• 11 months ago

That's an over simplification. AIG was bailed out. And it's investors were wiped out. But AIG owed a huge amount of money to banks and investment firms that had enormous benefit from the bail out. Those are the people who paid no price.

claw-el• 11 months ago

One challenge with the government taking large ownership in private companies is that it creates an opportunity to offload the ownership later, and that offloading might happen during a different presidential administration from the one that acquired it, and the offloading process can also be an opportunity to enrich someone else.

One example that comes to mind is the current Fannie Freddie Mac.

renewiltord• 11 months ago

In the end, it turns out that people didn't dislike Chinese policies of nationalized industries. They only disliked that the Chinese were doing it.

I can't wait for the "I don't think social credit scores are a bad idea. Cancel culture is good actually".

creato• 11 months ago

"People" you are referring to want a level playing field. If the Chinese government is tilting the field, there aren't a lot of good options. You can either watch the Chinese subsidize draining most productive capacity from the rest of the world, erect trade barriers (my preference, but it would require cooperation with other countries, which... ain't gonna happen for a while now), or try to tilt back.

verzali2• 11 months ago

I don't even think thats a joke. Trump doesn't dislike cancel culture, he just wants to be the one doing the canceling. And credit scores? You are already half way there with the way the government is acting.

sunaookami• 11 months ago

There is no social credit score system in China.

treyd• 11 months ago

If a company has truly become too big to fail that it makes sense for the federal government to bail them out, then why are we even leaving the welfare of the company up to private industry in the first place? It's just asking for ways to siphon taxpayer money out of the government through their willingness to buy shares. It inflates the stock price because it shows that the government might buy more share in the future at market rate. Its operations should be required to be more transparency, since if they're large enough that their failure would dramatically impact the welfare of the whole country, their operations should be subject to more direct democratic will (at least, more direct than the many steps removed from what is happening to Intel).

hluska4• 11 months ago

Intel is public and their financials have indicated this would happen. Even at my most irrationally exuberant their stock buybacks didn’t make much sense.

I’m not sure what “more transparency would look like to you, but publicly traded companies with audited financials are quite transparent. As for the part about siphoning money, history has shown that taxpayers do well. In 2008, the US government took roughly 80% of AIG, sold off their stock by 2012, made a roughly $15 billion profit and AIG is no longer considered too big to fail. It worked and did what it was intended to do. There are reasons to be positive about this.

justonceokay• 11 months ago

Maybe. I have worked in the corporate world for decades. My partner works in the government. My perspective is that the government office wastes so much time (and therefore $$) that I often have to keep my mouth shut to maintain peace in our relationship. There is no “disagree and commit” mentality. More like 9 months into a project and someone starts to feel “uncomfy” about something and we’re back to the drawing board.

I do believe the government is in a better position to provide services to the poor, but they are in no way going to be cheaper in the long run.

That being said, I do live in Seattle, which has a particularly “bogged down” government. Look up the “Seattle process” for some horror stories

7952• 11 months ago

Maybe part of a bailout should be IP release for free to American companies. And the same would be true about a bailout of Boeing (for example). Make it easier for other companies to compete and eventually reduce the risk.

charliea03• 11 months ago

I think punishing interest rates are better than an equity stake. As Intel's rally shows, having the government as your equity holder is actually amazing for investors.

mempko2• 11 months ago

On a related story. Tesla was saved by a $500 million bailout loan from the DEO loan office. Part of the agreement was that the US government would take a stake in Tesla UNLESS they pay back the loan ahead of schedule. That's why Tesla paid it back ahead of schedule, Elon didn't want the government to take a stake. But he spun it as a victory for the US tax payer.

EDIT: Before downvoting, tell me where I'm wrong.

vel0city2• 11 months ago

You're wrong because it wasn't some bailout it was a normal government loan available to to a wide range of companies. I'm not Tesla stan but it's massively misrepresenting the loan to call it a bailout. It's the kind of market investing the government should be doing, underwriting somewhat riskier loans to push the envelope on technology.

https://www.energy.gov/lpo/advanced-technology-vehicles-manu...

anon2915• 11 months ago

The government is not 'bailing' Intel out. Intel's CPU business is profitable. Their manufacturing is not. America gave intel grants to build better manufacturing to secure America's national security interests. Congress did not authorize any acquisition of Intel shares.

All the talk about this from a business / investment side leaves out the simple fact that this is not actually authorized by anyone with the power to actually do such a thing.

Essentially, the government, elected by the public, voted to offer grants to intel, and then intel shareholders woke up today to find their equity had been diluted.

rnrn2• 11 months ago

Are you sure congress didn’t authorize this ? i.e. actually specified that the money could only be used for grants and could not be used for equity purchases?

The Department of Commerce is authorized to provide funding in various forms, including grants, cooperative agreements, loans, and loan guarantees, in exercising its Section 9902 authorities

https://www.congress.gov/crs-product/R47523

AFAICT the relevant section of law says it is up to the Secretary of Commerce to determine the funding type to be used for the semiconductor financial assistance

https://www.congress.gov/116/plaws/publ283/PLAW-116publ283.p...

See my other comment : https://news.ycombinator.com/item?id=44995799

webninja6• 11 months ago

That might not all be true. Another comment above here claims the shares came from Intel’s own unsold stock of shares thus not causing any dilution.

colmmacc2• 11 months ago

It's not otherwise related to all this but a real bug bear of mine is that municipalities don't get part ownership - along with controlling rights for matters like sales or relocations - of sports teams when we subsidize their stadiums through taxes.

foxglacier4• 11 months ago

The municipalities could negotiate for those rights when they agree to pay for the stadium. It's on them if they risk it.

GypsyKing716• 11 months ago

Government is starting to be to big to fail. Living in the Great Lakes region its just the reality of it, as the geopolitics of the region are outplayed by idiots in other parts of the state.

ants_everywhere• 11 months ago

They're converting a grant, so Intel is worse off due to this move.

The only real benefit I can see is it looks more revenue neutral because the government getting something of value and Trump is unpopular for spending so much money on unfunded tax cuts.

electriclove4• 11 months ago

It is going to help ensure that Intel doesn’t just waste the $8.9B they are getting

UncleOxidant4• 11 months ago

I think it would've been much better to incentivize the likes of Apple and Nvidia to make investments in Intel. They need to have their designs fabbed, they have a good amount of geopolitical risk. They also have a lot of money on hand. Didn't Apple say they were going to invest $600B into the US? (not that that's really going to happen), ok, so why not put $50B into Intel?

electriclove4• 11 months ago

Because that is not a good use of Apple’s $50B.

softwaredoug4• 11 months ago

The “our president made a deal!” part of it makes me skeptical of actual long term patterns past a Trump administration.

While not walked back completely, a lot of what Trump does is minimized and scaled back after the initial theatrical moment. Still in a bad place, but usually some TACO moment happens.

And then, in the end, it’s some executive action that lasts as long as the current president is in power.

rpmisms6• 11 months ago

Democrats will not walk this one back. Having a stake in a hugely important industry is valuable. Being able to directly shape Intel's path is going to be historically important.

vlovich1235• 11 months ago

The heavily criticized auto bailout was precisely this way and actually turned a profit once the government sold its stake. This is different and I can’t imagine the government will ever sell its stake.

pfannkuchen3• 11 months ago

Did it turn a real profit or a nominal profit, I wonder? I remember hearing a brrrr sound around that time.

rpmisms6• 11 months ago

I actually am interested in the government having a voting share in big companies. They have an interest too, and seeing what it is is neat. Basically, I see this as bringing certain dealings above board.

georgeecollins5• 11 months ago

That makes sense. I think the thing that would make capitalism better is if the government did more to own the means of production.

Terr_• 11 months ago

On the other hand, I wish it were a more formalized process

It must at least involve Congress!

What's happening here is crazy: It's the same as if Congress authorized $X for a city bridge and Trump comes in and holds up the funds demanding a cut/kickback of the tolls.

The Constitution does not give the Executive the power to arbitrarily modify what Congress has authorized, converting between grants versus loans versus stock-purchases versus plain extortion.

rnrn2• 11 months ago

I thought this too, but after reading some of the other comments here I read some of the text of the chips act and the 2021 NDAA (mostly section 9902) and AFAICT Congress appropriated a bunch of money for financial assistance for semiconductor companies and gave the Dept of Commerce the authority to determine the funding type.

That they were grants instead of any other instrument appears to be a Biden Commerce decision, not a congressional one.

I’m no lawyer and could certainly be missing something i the law that says it has to be grants but from what I see it looks like figuring out what to do the the money was pretty much delegated to dept of commerce with limited direction about eligibility and review criteria.

thisisit7• 11 months ago

Government shouldn't bail out anyone. Period. It should enact preferential policies like grants, tax cuts, subsidies etc. for industries they want to promote. It is done all the time. That is what happened with the CHIPS Act.

The moment 10% stake was announced this became political. While the stated reason might be national security etc, in reality something else might be at play.

One, this government and its supporters have been talking about government "wasteful" spending. So, a stake shows that they got something in return for that public money. The money is now "well spent".

Second, it helps boost the political "dealmaker" image of POTUS and we all know how much he cares about his image.

azinman23• 11 months ago

Except if Intel goes there’s no leading chip manufacturer left. You can’t just (easily) tax cut your way to having that concentrated knowledge and market position.

SergeAx2• 11 months ago

They ARE bailing Intel out. The company is in a terrible state and obviously incompetitive.

Eddy_Viscosity22• 11 months ago

If a company is a position where government aid is needed and it is objectively identified as strategically important to the nation, then I think that support can be justified. However, the current executive classes should be fired - they were bad at their jobs. No golden parachutes, no deferred bonuses, no pensions. Any bonuses in the years leading up to the bailout should be taken back. Shareholders should also take a hit. Bailouts should be so painful and costly as a disincentive to the manager class. They shouldn't get to reap the rewards when things are good AND when things are bad.

coremoff2• 11 months ago

I agree with what you're saying, however I think talking in absolutes is counter-productive:

No golden parachutes, no deferred bonuses, no pensions

In my opinion, hard cutoffs like this create perverse incentives, but there definitely need to be consequences for actions.

loeg3• 11 months ago

Well, it's certainly newsworthy. Bizarre.

solardev• 11 months ago

The U.S owns 10% of Intel now? What does that make us... $20 richer?

bink4• 11 months ago

Today we are all nana... against our will.

lysace2• 11 months ago

Good luck, Trumpistan people.

akozak• 11 months ago

A lot of people are commenting on this without reading the actual content of the deal, which is spelled out in Intel's press release: https://www.intc.com/news-events/press-releases/detail/1748/...

theptip2• 11 months ago

the government made an $8.9 billion investment in Intel common stock, purchasing 433.3 million shares at a price of $20.47 per share, giving it a 10% stake in the company
Of the total, $5.7 billion of the government funds will come from grants under the CHIPS Act that had been awarded but not paid, and $3.2 billion will come from separate government awards under a program to make secure chips

Interesting accounting there. I guess the government was threatening to void the grants or something? Why would Intel donate shares for grants already approved?

I guess this nets out to a stock issuance with no downward price pressure, so still not a bad trade for Intel if they thought those grants were worth nothing.

mandevil• 11 months ago

Because this clears the way to sell Intel Foundry and separate the chip design from the chip-manufacturing businesses completely.

The CHiPs act money had claw-backs such that if Intel sold the Foundry off they had to pay the government all the money back. This new deal waives all the clawbacks and says instead the Government gets warrants, good for five years, for 5% of the company at $20/share, good once they control less than 51% of the Foundry.

Ergo, the reason for the deal is that the board wants to sell off the Foundry, and didn't want to pay back the CHiPS act money.

theptip2• 11 months ago

Good context, thanks. If it’s likely that the Foundry will be sold off, do you view the extra 5% as a short-term profit and not really a geopolitical/strategic protection?

Seems the Foundry is the bit that USG really is trying to backstop.

mplewis• 11 months ago

Just another Trump shakedown. Nothing to see here.

rpmisms6• 11 months ago

It's extremely good business for the US. Trump doesn't get to take this with him.

inerte• 11 months ago

No board seat or governance rights. What's the government getting out of this? Trump brags of a good deal? Might profit in the future? Or _actually_ although technically there's no governance, government might actually influence how Intel is run?

Besides politics and image, are there any benefits?

0xbadcafebee• 11 months ago

I finally grok the Republican party. It's only socialism if it helps the poor. Government handouts to corporations and trade protectionism? Mainly helps the rich, so it's not socialism. Tax money spent on a special interest program? Again, if it mainly helps the rich (or their party's base), no problemo. They're the Kleptocracy Party.

burnt-resistor2• 11 months ago

Klepo-pluto-kakisto-kratocracy with socialism for the rich.

tdhz77• 11 months ago

At least in 2008 there was a financial crisis. This feels like somebody has stock in intel.

electriclove4• 11 months ago

Capitalism with Chinese characteristics

rhelz• 11 months ago

This is one of the saddest days of my life.

bdangubic• 11 months ago

North Korea in the streets, Venezuela in the sheets... :)

BurningFrog2• 11 months ago

So did they buy these stocks from Intel itself?

Does that dilute the share other intel stock owners have?

This stuff always confuses me.

anon2915• 11 months ago

The stocks were not bought. Intel's board literally voted to give 1/10 of the company to the American government. Any sort of other take is propaganda. The claim that the shares were in exchange for grant money is false. Grant money is free and requires no payback. Congress authorized grants, not equity investments.

theurerjohn3• 11 months ago

So did they buy these stocks from Intel itself?

in a sense, although buy is not quite the right word. there were grants promised to chip manufacturers under certian conditions. trump decided to wave those conditions just for intel in exchange for 10% of the company.

Does that dilute the share other intel stock owners have?

no, the shares were already existing and owned by intel.

resters• 11 months ago

this is a step away from capitalism and it harms any startups destined to compete with Intel and discourages investment in the startup ecosystem that might compete with Intel, and punishes investors/customers in/of any of Intel's competitors.

Nevermark3• 11 months ago

If the US had bought 10% of TSMC, with no voting rights - just increased dependency - it would have sent a very strong signal.

Its an interesting idea, not a serious suggestion.

gizajob6• 11 months ago

That would have cost more than $100billion, not the $10billion for the same sized stake in intel.

shusaku2• 11 months ago

The US has been slowly but steadily sending the opposite signal over the past year: “just wait a little and you can have Taiwan”

rpmisms6• 11 months ago

If the US can replace the need for Taiwan... Yeah. They no longer matter to us if we can replace the manufacturing capacity.

notherhack2• 11 months ago

A government stake gives confidence in the company’s survival that a one-time cash dump for the CHIPS act couldn’t.

It’s not a lot different than what car and financial companies got in 2009. They were about to go under because no one thought they’d be around long enough to get out from under and deliver goods or pay their debts. The government stake enabled them to keep operating and eventually recover and then the government returned the stake to the market (or will soon w/ Fannie & Freddie).

anonu• 11 months ago

It's a way around the "horrible horrible" CHIPS act.

alfiedotwtf3• 11 months ago

Didn’t the US invade Iran when they did this to their oil industry? (Yes I know 10% is different to 100%, but wow… I thought the US shun commandeering of private companies?)

_zoltan_2• 11 months ago

if you're the US government, this makes sense. invest into your own chip maker.

whoisthemachine• 11 months ago

I have a feeling I'll be waiting a long time for the old "Tea Party" to rise up again and start protesting this.

Henchman21• 11 months ago

The only way you're going to get people to notice anything at all is if you shut down the internet.

ryoshu• 11 months ago

Working on it.

steveBK1232• 11 months ago

Comrade Trump seizing the means of production, glory to our leader

nashashmi• 11 months ago

America sovereign wealth fund.

burnt-resistor2• 11 months ago

Trump unitary executive privatized wealth fund using US taxpayer money.

And a free 747 that won't be useful or ready during this term, but hundreds of millions of taxpayer money will be poured into for the "library". The VC-25Bs were already under construction.

quantum_state• 11 months ago

I am surprised there is so much talk about China. Can we just focus on our own business here in the US: fixing the roads, bridges, schools, cities, etc.? Let’s make America greater first!

anigbrowl3• 11 months ago

It's interesting that Trump's announcement of this includes a claim that the government has acquired this 10% stake without paying anything for it. Of course, that's probably just bluster to impress the more impressionable part of his base, but I imagine Intel's CFO isn't going to sleeping well for the next few years.

roody15• 11 months ago

The question is can a US purchase help Intel turn things around? As a corporation Intel has really struggled for over a decade and has trouble with its foundry back even at the 10nm level. Will the US purchase have any impact on Intel reaching competitive levels with TSMC?

pottertheotter• 11 months ago

I'm all for the government getting stakes in companies that it invests in (see below), but I find it really odd that we already awarded this money to Intel through the CHIPs Act and, instead of disbursing the funds as a grant, they converted it into a stock purchase. I don't like that they're not going along with the law, although that's par for the course.

On getting a stake, I find it odd that the right wing (or at least Trump?) is all for getting stakes in businesses, as that seems so counter-intuitive to what they're about. Personally, I think that if the government is putting billions into strategic industries, taxpayers should get a financial return, not just vague promises of jobs or “competitiveness.”

mancerayder• 11 months ago

The French government owns stakes in big corporations. And why not, why wouldn't the public own some stake and government (us, in theory) have some control?

Airbus being an example.

Is it because Trump did it? If Biden had done it, the comments from the right would sound like the sarcasm in this message thread.

Trump's temporary, he's not taking his stake home when his term expires.

apical_dendrite3• 11 months ago

The issue isn't the US taking a stake in Intel. The issue is Trump running a protection racket where he threatens to use the entire force of the federal government against a corporation or institution unless they pay some very large amount of money. This is the same tactic he's using with universities and law firms.

Nemo_bis2• 11 months ago

If Biden had done it, SCOTUS would have struck it down as a violation of the Takings Clause or any made up theory.

adapteva2• 11 months ago

Any strings attached? If not, ironically a big chunk of those US tax payer dollars will likely end up in Taiwan/TSMC.

colechristensen2• 11 months ago

There's an option for the US to buy an additional 5% if Intel sells so it doesn't have majority ownership of its fabs.

But I think the real strings are a soft, private insistence that Intel won't be allowed to sell itself overseas.

The Defense Production Act and the Committee on Foreign Investment in the United States would be used to prevent the sale. The carrot is the whatever $18B in grants and investment, the stick is legislation that allows the government to prevent a sale.

https://home.treasury.gov/policy-issues/international/the-co...

adapteva2• 11 months ago

No strings common share purchase means cash in hand, which implies Intel can spend it on any operational cost, including buying billions in TSMC wafers (which they already do).

kwar13• 11 months ago

Not that far from having full-out state-owned enterprises the way things are going.

sgnelson2• 11 months ago

Everyone is talking about "bailouts" and "owning a company that the government funds."

This isn't about that at all. This is about the breakdown of the rule of law, a unitary executive bypassing all other branches of government and demanding a private enterprise give itself over to the government.

If you don't think there was an "or else" as part of this deal, you're largely mistaken. If you don't think that there will be other questionalbe demands placed on Intel in the future from this government, you are largely mistaken.

But y'all go ahead and can keep arguing over whether we should "get something back" from this deal. Because that's really going to maker ameraica graet agian.

JumpCrisscross5• 11 months ago

unitary executive bypassing all other branches of government

Is there even a pretence of a law being cited by the White House?

edge172• 11 months ago

...thats how the US Constitution works. Congress passes laws (CHIPS Act) and the executive branch is empowered to carry them out - in this case the Secretary of Commerce and Commerce Dept. One can argue whether it stretches the intent of the law, nothing wrong with debate. But as of now, I don't think any judge or court has contested in the interpretation of the language.

rayiner5• 11 months ago

Unfortunately, this ship sailed quite some time ago. For example, after the 2008 financial crisis, the Senate rejected a proposed bailout of GM. But Bush approved it anyway: https://en.wikipedia.org/wiki/Effects_of_the_2008%E2%80%9320...

However, it had been argued that the Treasury lacked the statutory authority to direct TARP funds to the automakers, since TARP is limited to "financial institutions" under Section 102 of the TARP. It was also argued that providing TARP funds to automaker's financing operations, such as GMAC, runs counter to the intent of Congress for limiting TARP funds to true "financial institutions".[79] On December 19, 2008, President Bush used his executive authority to declare that TARP funds may be spent on any program he personally deems necessary to avert the financial crisis, and declared Section 102 to be nonbinding.

Also, “unitary executive” doesn’t mean overriding other branches. It just means that whatever powers the executive branch does or does not have are exercised by the President, just like the 535 members of Congress exercise all the powers of Congress, and the 9 Justices exercise all of the powers of the Supreme Court. It means that executive branch employees don’t have independent powers, just as House staffers and Supreme Court law clerks don’t have independent powers.

See: https://en.wikipedia.org/wiki/Federalist_No._70 (“Federalist No. 70 emphasizes the unitary structure of the executive. The strong executive must be unitary, Hamilton says, because ‘unity is conducive to energy...[d]ecision, activity, secrecy, and dispatch will generally characterize the proceedings of one man in a much more eminent degree than the proceedings of any greater number.’”).

apical_dendrite3• 11 months ago

What Trump is doing is pure extortion. Intel gives up equity, and in exchange, Trump maybe doesn't use the massive power of the state to claw back billions of dollars that were legally awarded to Intel, and Trump stops pressuring Intel to fire their CEO (note how he now calls the CEO "highly respected").

The comparison to the GM bailout makes no sense. GM got something that it needed from the bailout. Here, all Intel is getting is the withdrawal of threats that Trump himself made. It's mob boss style government, and it's happening to many institutions in this country (law firms, universities, corporations, etc). Why you would want to try to normalize it is utterly beyond me. Maybe you just like being the "well actually" guy because you think it makes you sound smarter than everyone else.

anon84873628• 11 months ago

Also, “unitary executive” doesn’t mean overriding other branches

I feel we're headed for a No True Scotsman fallacy. The Trump Regime and Roberts court endorse the unitary executive theory, and they are happily overriding Article 1 powers and violating laws like the Administrative Procedures Act based on this theory's farcical and ahistorical logic.

If the theory wasn't giving him more power (like firing non-political appointees without cause or withholding funds appropriated by Congress) he wouldn't be using it.

cma2• 11 months ago

Also, “unitary executive” doesn’t mean overriding other branches. It just means that whatever powers the executive branch does or does not have are exercised by the President,

And then you find the executive is what chooses to enforce rulings against the executive. They were not trying to set up something like the UN security council with a defacto veto on all passed law.

smt88• 11 months ago

Trump was explicit about the "or else" part. He said publicly that Intel did it because "[the CEO] wanted to keep his job," a reference to Trump's earlier pressure for him to be fired due to his vulnerability to pressure from the CCP.

fluoridation• 11 months ago

Why would the government need to "demand" to buy a piece of a publicly-traded company? Is 10% of Intel more than what is being traded in the public market?

BurningFrog2• 11 months ago

As I understand it, the government didn't pay anything for these shares.

andsoitis5• 11 months ago

is about the breakdown of the rule of law, a unitary executive bypassing all other branches of government and demanding a private enterprise give itself over to the government.

What do you think about Senator Bernie Sanders backing Trump plan for government stake in Intel?

https://www.aljazeera.com/economy/2025/8/20/us-senator-berni...

frollogaston4• 11 months ago

I'm glad Sanders never made it past senator. If only Trump never made it past casino owner.

verzali2• 11 months ago

It's odd seeing Republicans endorse state owned companies. Bernie has at least been consistent in his beliefs.

sgnelson2• 11 months ago

I think "fuck your whataboutism."

Sparyjerry• 11 months ago

The "or else' isn't the problem. The problem is the government trying to get involved in the first place. Intel was not forced to give away 10% of their company for 10 billion dollars, they simply wanted the 10 billion dollars. It's the fault of our government for propping up failing companies. Intel should be dying instead.

thaumasiotes5• 11 months ago

Intel may well have wanted to donate some ownership more than it wanted 10 billion dollars. They are now in a position to argue forever that what's good for Intel is good for the federal government.

thisisit7• 11 months ago

“National security” is often used by third world countries to nationalise companies and industries. Often with a bad outcome.

Once the money is in, government becomes invested in the success of the company. This leads to preferential policies and government demands for the invested company. I think it is safe to say that US is going full on third world strong man government at this point.

sschueller• 11 months ago

This will scare off foreign investment. Especially pharma which can be considered national security. Why would I invest billions in the US to risk having my factories taken by the US government when the market in India or China is way bigger and the risk at this time seems a lot less.

e40• 11 months ago

Straight up blackmail. It was my immediate thought, and nothing I’ve since it was announced has changed my opinion.

tempodox• 11 months ago

This is about the breakdown of the rule of law

Wherever Law ends, Tyranny begins.

phkahler• 11 months ago

Let Intel fail. Other companies will buy state of the art(ish) EUV fabs at a fraction of the normal cost when they're liquidated in bankruptcy. Then we might have several companies on the leading edge.

dev1ycan• 11 months ago

A lot of criticism of China is about how the government controls companies... isn't this literally it? I mean it was already the case before, but they tried to pretend it wasn't, now they literally own a stake in intel.

throwil• 11 months ago

Buying Intel chips means supporting American government from now onwards. Lot of countries hate it

andsoitis5• 11 months ago

US Senator Bernie Sanders backs Trump plan for government stake in Intel — https://www.aljazeera.com/economy/2025/8/20/us-senator-berni...

qwertytyyuu• 11 months ago

Oh my god, the us taking ownership of a company, instead of giving them free money? Under the trump administration?

perryizgr8• 11 months ago

This is an absolute failure of free market capitalism. The company which was at the forefront of the entire stack for decades (hardware design, chip design, chip fabrication, software design), headquartered in the freest modern country, slowly turned into a husk unable to compete with upstarts on the other side of the world.

Why is it that a fab is so much more exorbitantly expensive to run in US than in Taiwan? Wasn't higher labour cost supposed to bring disproportionately higher productivity? Why did Intel not build ultra advanced fully robotic fabs? Where's the innovation? Why did no other competitor crop up in the US when it has been clear for a decade that Intel is lost?

pengaru• 11 months ago

As a tax paying US citizen, I look forward to receiving my INTC.us dividend checks.

pr337h4m• 11 months ago

Never take government money. RIP Intel.

hunglee2• 11 months ago

Incredible how fast Trump is changing political culture - wasn't so long ago that protectionism, economic coercion, military-civilian fusion, state owned enterprise s was denigrated as 'communism' and hence beyond the pail. He's even mooted the possibility of redirecting tariff revenue directly to the people, an act of Chavez-esque socialism which would have been unthinkable a year ago. Anything can happen with this administration, I suspect that is the reason why the American people elected him

foogazi2• 11 months ago

Guess capitalism doesn’t scale to the international level

deafpolygon• 11 months ago

Knowing Trump.. that 10% stake will be sold to one of his cronies. It's just a matter of when.

AlecSchueler• 11 months ago

Where is DOGE while this is happening?

Cornbilly• 11 months ago

Exposing a US asset and getting his family kidnapped by the Taliban

https://www.propublica.org/article/doge-musk-mohammad-halimi...

93po• 11 months ago

would be cool if we didn' t reward companies with billions of dollars for offshoring production and labor to maximize profits at the expense of american jobs, and apparently, national security.

atkailash• 11 months ago

How is this not a regulatory conflict of interest? Or strong arming them to change practices under threat of pulling all the stock out?

nozzlegear• 11 months ago

At the risk of sounding a bit flippant, there's a popular 2018 headline from The Onion that becomes increasingly salient as time passes:

Trump Claims He Can Overrule Constitution With Executive Order Because Of Little-Known ‘No One Will Stop Me’ Loophole

https://theonion.com/trump-claims-he-can-overrule-constituti...

U.S. government takes 10% stake in Intel

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