Comment by cvoss

Comment by cvoss a day ago

15 replies

View on Hacker News

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.

m4rtink a day 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

Reply View 7 replies
  • tonetegeatinst a day ago

    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.

    Reply View 1 reply
    • delfinom a day ago

      New CEO wants to keep the fabs though. It was the board chair pushing him to cut the fabs.

      Reply View 0 replies
  • dylan604 a day ago

    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

    Reply View 1 reply
  • topspin a day ago

    > 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.

    Reply View 0 replies
  • gizzlon 21 hours ago

    > 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.

    Reply View 0 replies
  • aorloff a day ago

    Imagine the stakes of the next election after such an environment

    The sparks will fly

    Reply View 0 replies
wahern a day 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.

Reply View 1 reply
  • wahern a day ago

    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.

    Reply View 0 replies
MyOutfitIsVague a day 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.

Reply View 1 reply
  • foota a day ago

    The thing you're missing is that it was different administrations offering the grant vs the "investment".

    Reply View 0 replies
skybrian a day ago

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

Reply View 0 replies