U.S. government takes 10% stake in Intel
(cnbc.com)569 points by givemeethekeys a day ago
569 points by givemeethekeys a day 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.
Yes, but its semiconductor industry so its complicated.
Intel got money via grants from the chip act and via other governments. Part of the reason they got that money was to help them build the chip fans in the USA and funding research and workforce in other nations. The fact Intel has claimed its slowing construction basically is a full 180° spin and will set them back in manufacturing ability.
Previous CEO strategy was focused on heavy investment in catching up on manufacturing ability. But once you get stuck on a node it becomes expensive to catch up.
New CEO is clearly trying to shed weight. They have let go of a significant % of workforce, stopped certain projects all together, and seem to be basically selling off parts of their technology and assets to keep cashflow positive.
Given the current CEO and his history and connections, plus the US government involvement it looks like a rocky situation.
That's precisely how private citizen Trump ran his businesses as well. Make an agreement with contractors to get work started knowing full well those agreements were never going to be honored. Instead, refuse to pay anything forcing contractors to renegotiate at much worse terms vs not getting anything at all. The whole time banking on these contractors not willing to fight in court. That was the art of the deal
> Isn't that pretty bad, Darth Vader style changing of previously agreed on deals ?
There has been some changing of deals on Intel's part as well, with indefinite delays on US fab buildouts the US passed a bill to subsidize. Now the US is taking some equity for its debt.
Far more dramatic Government intervention took place in 2009 when the US bailed out domestic automakers, including equity. Don't recall as much angst about that among the laptop class. Because Obama.
> Isn't that pretty bad, Darth Vader style changing of previously agreed on deals ?
haha, is this the first you hear of this Trump guy? He rutinely breaks deals, like all the fucking time. (I get that this was not his deal, he breaks those too)
A deal with Trump is worth nothing.
> 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.
Also, the timing is mighty suspicious, with this NIH decision being published yesterday (21st) and the announcement happening this morning (22nd). I wouldn't be surprised if Intel's lawyers were waiting (perhaps slow-walking the admin) for this particular NIH decision, and when it came down in favor of the government advised the CEO the only way to get the remaining billions disbursed in any reasonable amount of time was to acquiesce to Trump's demand and close the deal.
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.
I think a better rephrasing is "government is giving $8.9B from the CHIPS act in exchange for a 10% stake in the company"
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.
> Worth noting that Intel is the only company that had these kinds of shenanigans pulled with their grant.
Sure, but Intel's new CEO is making a lot of noise that indicates that Intel is maybe not going to be able/willing to build some-to-many of the things the CHIPS money paid for.
Giving FedGov a 10% stake in the company [0] is better than taking the money back for nonperformance, wouldn't you say?
[0] Which -as I understand it- was the sort of thing that was done for those finance companies that were Too Big To Fail when all that fraud^W novel financial engineering eventually caught up to them.
> Depends on who you ask. Trump himself seems to think the US is getting 10% for free.
When you're really familiar with extortion, everything looks like an opportunity for extortion.
Yes, but in this case the restaurant was already empty of customers on most evenings.
Breaking into an empty locked building is still breaking and entering.
My point was that Intel is already in need of rescue investment all on its own.
I'm just pointing out a limitation of the Mafia analogy.
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.
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...
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?
So, this happened just because one man (you know the one) decided it should happen? No vote or anything?
> 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
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?
> 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.
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!
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.
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...
So did they buy these stocks from Intel itself?
Does that dilute the share other intel stock owners have?
This stuff always confuses me.
> 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.
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.
Exposing a US asset and getting his family kidnapped by the Taliban
https://www.propublica.org/article/doge-musk-mohammad-halimi...
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.
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?
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".
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!!
They were still complaining about Solyndra over a decade later.
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...
Everybody lives on their own personal reality nowadays, but for me the internet has been incredibly loud about it.
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.
Maybe in this specific case, but I don't see this kind of policy as necessarily ideological.
It's just requires the government to not be totally market dogmatist.
Here's some emergency reading
https://theupheaval.substack.com/p/its-not-hypocrisy-youre-j...
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.
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.
Comrade Trump seizing the means of production, glory to our leader
Discussion from yesterday about Intel's and Trump's woes
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.
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.
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
If we go by Marxist definitions, universal healthcare, universal education, etc. are communism, not socialism ('to each according to their need', which I interpret as capacity to provide a return on an investment of resources by society in one).
We have really little socialism in modern society, instead we have market systems combined with elements of communism. The only socialist elements we have are copyright and patents (you get them for contribution, so it follows the Marxist maxim characterizing socialism 'to each according to his contribution').
It's really a strange thing that communism, this hypothetical post-socialist stage of development, is so easy for states to adapt and so uncontroversial that elements of it are implemented today on a large scale, everywhere from the US to Africa, when socialism which Marx imagined as the stage that would give rise to communism is a relatively small element of society. I suppose the software industry has eaten a lot of other businesses though, and that it in the end is dependent on copyright, so maybe we actually are in the socialist stage, only with large middlemen intermediating 'to each according to his contribution' part. Socialism but with capitalist middlemen.
I’m going by the GOPs definition where “Socialism bad” because bigger govt. I realize there are internal inconsistencies of that definition.
> So by that logic, state provided healthcare is not socialism.
Well, it's not. It's only socialism if the state decides to provide it for everybody.
A state-owned corporation isn't necessarily socialism.
(And yeah, you say it like if it's a bad word...)
I think the phrase i heard before is State Capitalism. But i could be wrong
Yes. State capitalism is definitely the word.
Usually I suppose, when I think state capitalism I would think something like the Soviet Union, where this happens across many businesses with the state owning everything, but I suppose it is state capitalism, or a state capitalist element in a market system. One might even call it a mixed economy, or a sort of hacked-apart Swedish model without labour unions and state ownership of only certain strategic industries, rather than let's say, state ownership of hospitals.
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?)
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.
My first thought, how many Trump people just front ran this?
As of last week: https://bsky.app/profile/unusualwhales.bsky.social/post/3lwf...
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.”
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!
How an anti communist govt slowly is adapting communistic ideas !!
US Senator Bernie Sanders backs Trump plan for government stake in Intel — https://www.aljazeera.com/economy/2025/8/20/us-senator-berni...
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.
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.
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.
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.
> "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.
> 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!
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?)
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.
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.
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.
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.
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
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.
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.
No, that was sarcasm that employed a slippery slope argument. I was not seriously suggesting that the federal government will buy Facebook. I was suggesting that we should avoid a pattern of behavior (slippery slope) that might lead to the socialization of other companies. Giving Intel a grant to keep it from failing is very different from demanding 10% in exchange for funds to keep it from failing.
I've lived long enough to see the Republicans become the socialist party
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...
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
Knowing Trump.. that 10% stake will be sold to one of his cronies. It's just a matter of when.
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
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?
Yet another bailout from the US government as accurately predicted. [0]
“The government paid nothing for these shares..”
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.
Be kind. Don't be snarky. Converse curiously; don't cross-examine. Edit out swipes.
When disagreeing, please reply to the argument instead of calling names. "That is idiotic; 1 + 1 is 2, not 3" can be shortened to "1 + 1 is 2, not 3."
https://news.ycombinator.com/newsguidelines.html
We detached this comment from https://news.ycombinator.com/item?id=44990485 and marked it off topic.
That's needlessly rude. I just found the sequence of events confusing. If I promise you a cash gift, then some months later demand you to give me something in return for the promised gift, it would be silly to say that I paid absolutely nothing. I don't consider that pedantic.
Okay, you’re right, I’m sorry
I ran into someone recently that derailed every conversation for a needless correction and would opt for arguing about that instead of going back to what the initial conversation was about. This reminded me of that and my tolerance is low for it, for now
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.
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.
> 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.
What if the government demands they start paying dividends?
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.
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.
Deregulate RISC-V, threaten Intel with loss of IP if they can't profit on fabs, threaten to cut Softbank off of American companies if Masayoshi Son won't onshore RISC manufacturing.
There's soft-power coercion left on the table, the only thing we buy with Intel stock is a C-suite's dinner bill.
> Deregulate RISC-V
What does that even mean?!?
It's already OSS and royalty free. I've participated Series A and B rounds on startups working on RISC-V design.
> threaten Intel with loss of IP if they can't profit on fabs
Investing in Capex is inherently going to put you in a loss for several quarters
> threaten to cut Softbank off of American companies if Masayoshi Son won't onshore RISC manufacturing
He doesn't own RISC-V IP.
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This is why I hate HN now. ICs with no domain expertise think they should have a voice.
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?
Given the circumstances and the relatively low dollars involved, it would be interesting to see the experiment: $10B darpa program to establish a scalable fab ecosystem in 5 years via consortium.
This was how the internet was created, darpa stitched together dozens of performers to get the key ingredients (eg bbn gateways, academic subnets, experimental applications, protocol research.
They even led the last ditch marketing Hail Mary after years of no-one caring about the program besides the zillions of engineers from all around building it by organizing a press day in a hotel ballroom for a demo day.
As a taxpayer I’d strongly support 5B/.1% of the fed budget for a few years just to learn what happens in the attempt.
$5B wouldn’t be nearly enough to create a leading edge fab. Estimated cost for TSMC is $20B.
China has been trying and failing to build a competitive fab for years, has the rare earth minerals in its back yard, etc and can’t do it.
The second issue is, who exactly is going to use these fabs once they are built. One issue that Intel has is that its “customer service” sucks. TSMC will bend over backwards as a partner. No one wants to work with Intel.
Can you imagine Apple or Nvidia wanting to work with a government owned chip fab?
Oh my god, the us taking ownership of a company, instead of giving them free money? Under the trump administration?
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).
> 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?