White House in Talks with Intel for 10% U.S. Government Stake
Related: Pentagon becomes largest stakeholder ($400 million) in rare earths mine in California's Mojave Desert.
https://www.metaltechnews.com/story/2025/07/16/tech-metals/d...
Note that this makes USG the largest stockholder – BlackRock and Vanguard (as institutions, not funds) are about ~9%.
Preparations up for WWIII? https://en.wikipedia.org/wiki/Defense_Plant_Corporation
Intel does not have to be eternal. There was a time before Intel.
We need to be doing much, much more of this so that the country has ownership of substantial percentages of the critical infrastructure, including AI. That seems to be one of the only ways that the citizens in general will be able to share in the fruits of the technology, similarly to how Alaskan citizens get payments from petroleum.
Part of the reason we don't want this is because it creates an enormous government spoil, which is the decision to label a given company as part of the critical infrastructure of the country. For example: why Intel and not AMD? Does Micron make the cut? Seagate? What about the companies that make the inputs to the fabs? Telecom companies that run the Internet? Microsoft & Apple because business runs on their software?
This is Too Big To Fail on steroids.
> citizens in general will be able to share in the fruits of the technology, similarly to how Alaskan citizens get payments from petroleum
The alternative approach is right there in your answer. Like in Alaska or Norway, tax the winners and apply the benefits to citizens.
Sadly, we are going the other way both on taxation and benefits. The good news is we can at any time choose to live differently. Some might debate whether we could maintain our competitive business environment if Intel or Nvidia paid a tax rate comparable to yours, but perhaps it's worth a try?
Why can't we just raise taxes on corporations?
Socializing the means of production.
Heh. State socialism https://en.wikipedia.org/wiki/State_socialism
"Capitalism with MAGA characteristics."
* https://en.wikipedia.org/wiki/Socialism_with_Chinese_charact...
>... advocates state ownership of the means of production. This is intended either as a temporary measure, or as a characteristic of socialism in the transition from the capitalist to the socialist mode of production or to a communist society.
I don't understand how the finances work here. Is the proposal that the US govt buys 10% of available stocks at some price from Intel to give them cash to operate? Why doesn't Intel just get some investors to do that? If Intel is no longer competitive from an investor standpoint, then what's the point?
A quick ChatGPT search tells me Intel owns none of it's own stock, so I'm confused. It tells me a company can sell newly created stocks and dilute the value of the old stocks. I didn't know this was possible. Is this the proposed case?
> It tells me a company can sell newly created stocks and dilute the value of the old stocks. I didn't know this was possible.
Yes, absolutely, and it's a fairly normal process. How do you think VC investment works? Founders take funding in exchange for diluting their ownership. Further investment rounds dilute all shareholders, including big investors from prior rounds. IPOs often involve issuing new shares, further diluting existing investors. Acquisitions can even result in zeroing out some classes of equity.
Existing investors put up with it because either a) they believe their diluted shares will end up being worth more in the long run, because the new investment is critical to growth or success, or because b) they don't have enough voting power to stop it.
Corporate structure and ownership is just a legal fiction. There's no set number of slices that a company is cut into, and contracts, terms, by-laws, etc. can change that at any time.
From the subhead
> Money earmarked for semiconductor company under Chips Act could be converted into equity
They’re already getting federal money.
An amount of stocks is created relative to the investment. Share value stays the same. Ownership percentage is diluted.
They can issue new stock I imagine. I think this is to keep fab capacity of advanced nodes still producing in the us and to ensure the engineering talent is not scattered by a breakup of Intel
> engineering talent is not scattered by a breakup of Intel
They'd be happy to nudge them from blue states (e.g. Hillsboro and Santa Clara) to red states.
Maintaining fab capacity requires product to run through that fab. Intel no longer has enough volume to maintain that on new advanced nodes (yeah, farming out CPUs to TSMC is super helpful on that front), and nobody wants to be a foundry customer of Intel given how badly they have failed to support those efforts over the past 20 years. I mean how badly are the fabs being run if they burned bridges with 3 different FPGA companies? The fabs need to be spun out of Intel and given a competent management team that knows how to run a foundry, build a new customer base and try to turn a profit in 10 years or so.
Honestly, throwing more money towards Intel without breaking it up is just going to increase the scale of the losses at this point. The internal culture is so broken that the likelihood of turning things around is negligible.
It's like loading more men onto a sinking ship. Gee, I wonder how this one ends.
While I’m pessimistic I do hope they turn their ship around. We don’t benefit from having less diversity in that market.
Agreed. As another commenter pointed out, this is state socialism. But sometimes state socialism works. The other option is to let MBAs run Intel even further into the ground.
>The other option is to let MBAs run Intel even further into the ground
or worse, the government runs Intel into the ground while constantly taking more taxes to prop it back up.
Incompetent private companies eventually dissolve. Uncle Sam can siphon your paycheck in perpetuity.
Bingo - the solution to this is already programmed into the free market. Intel's failure can't be turned back around, especially not 10 years after the first cracks started showing.
It's not inherently wrong to want to prop up American chipmaking, but it is wrong to deny reality. No matter how much American scrip you put on the table, Intel's mistakes can't be undone faster than China can beat them.
Does the government not hire people with MBAs?
The government doesn't pay the same in cash comp as other places people could go in the private sector.
You'll get some people that are amazing and committed, but the rest are just kinda happy to be there. I wish govt comp was better and more competitive.
Mango and his cabal of clowns are rolling out a protection racket. smh.
Fan-tas-tic.
Well done, Republicans. Well done.. slow clap
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Im confused over the state of ideology within the republican party at this point. For years, government ownership and oversight has been demonized as the very thing that leads to inefficiencies and bad business practices. Now the same party has their figurehead looking to take partial government ownership of a business?
Can someone explain this ideological whiplash?
Because it's never been about ideals. It's about power and financial/economic dominance. Politicians will align themselves with whatever ideology will get them the support they need to accumulate power and money. Whenever they take actions that seem to violate that ideology, they'll use spin and propaganda to justify it so as not to anger their base.
I think Intel wants to stay alive so they are looking for a lifeline and the current administration wants to bring chip production into the US.
Intel's death would be very embarassing to that whole effort. So Intel has incentives (survival) and the administration has incentives (jobs in the US). The method is "whatever can be claimed as a win".
No US party seems particularly capable or keen to hold an ideological line but especially not the GOP from what I've seen. Not saying other countries have particularly impressive parties either. I'm less than thrilled with ours over here.
> I think Intel wants to stay alive so they are looking for a lifeline
I'm not sure Intel was asking for this.
It seems like a better approach would've been to broker a deal (he likes deals, right?) where companies like Apple and Nvidia (companies that are currently dependent on TSMC) would've been incentivized to make investments in Intel.
I agree, and I think the government’s incentive might also be a having strategic production capability in the US. Maybe they’re concerned about TSMC’s future with the tension between China and Taiwan?
That's all fine, but this is definitely heading into socialist territory. I guess they're out of ideas and this is how they incentivize. The free markets have failed?
My hypothesis is that this is government response (own stake in Intel) to another government’s action (hint take over of Taiwan) and as such is outside the free market. But I have no evidence to support it, it’s just an opinion and it could be that they view Intel as “too big to fail” or something like that as you suggest.
It's just about winning (read: more power for the upper class), not about ideals.
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"Flatten the curve for just 2 weeks." Wait, who was in power for the first year of Covid?
Democratic governors in almost all states that mattered, due to the aftermath of the 2018 election.
They used to be against tariffs and for free trade as well.
The Republican Party circa 2012 no longer exists. The hood ornament looks the same, but the car is completely different.
Party realignment:
https://time.com/7173651/democratic-party-alignment-history/
The Democrats moved from working class to the professional managerial class and the Republicans in reverse.
" For years, government ownership and oversight has been demonized as the very thing that leads to inefficiencies and bad business practices. "
This was their position just a few months back. This was the reason DOGE existed. At least that's what they said.
But it was never about that. It was always about the fact that they felt that they didn't have control of the government so they didn't want it dictating terms to them. Now that they have control and believe they always will -- now they believe that government should control everything.
To me it feels like the same whiplash around auto bailouts and equity. Different donors and lobbyists so the roles are reversed for parties.
I don’t think there’s ideology in politics any longer. And it’s even hard to predict what industries and firms are in favor.
> Can someone explain this ideological whiplash?
Easily. It's called fascism, one of the cornerstones being the marriage of industry and state. It has long been the marching direction of the US power structures, whether the individual participants cop to it or not. It has been an unwritten rule for decades and now it's just becoming more blatant. Republicans are not experiencing whiplash as much as they are becoming self-aware of their actual desires. There is a minority of the republican party that actually values small government (my respect goes out to them), but most of the party's actions to this end have been an obscene minority compared to their constant desire to either regulate morality via government overreach or enshrine their big business butt buddies into monopoly status.
While I feel the democrats are guilty of many of the same things, they are still a faction of what I would call the "capitalist-imperialist party." The GOP has been splitting off into the "fascist-imperialist party" for many years, which is likely one of the reasons for the political divide.
1. The Republican party of 10 years ago is not the Republican party of today. 2. Desperate times call for desperate measures.
What desperate times to you see here?
How are they different?
Consider that the current president campaigned on raising taxes, and was elected anyway.
Perhaps a lot of R voters didn't have a problem with that because they somehow assumed that enacting a bunch of tariffs wouldn't result in higher prices for them.
When did Trump ever campaign on raising taxes?
Perhaps you mean the tariffs which he promised that other countries will pay for?
It was a lie, but it was still a campaign to raise taxes on Americans.
Now they’re less subtle.
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2 decades of increasingly refined 24/7 propaganda designed to radicalize.
I don't think it's been refined so much as it's been amplified.
I mean the Republican part is now the party of the poor and working class while the Democrats are the educated and rich. As in who votes for them not necessarily who they pay lip service too. For example the Democrats still deeply message on them being the party of the working class even as the working class no longer votes for them.
They literally flipped inside the last decade.
If you view this around identity then its pretty straightfoward.
Republicans are the party of the dominant group and maintaining their power. Democrats are the party of the non-dominant groups and speading power across groups. Everything else is just chips to push these two agendas. And I think this is why Republicans will have a long-term advantage. The dominant group is by definition the group in power and its the group that people eventually want to be in (see Hispanics). No one wants to stay in the out-group.
Dems/Repubs seem evenly split by income.
https://www.nbcnews.com/politics/2024-elections/exit-polls
The Republican party is now the party of billionaires, grifters, the dumb, and the duped.
One era can be exemplified by people who sound like Mitt Romney or George Bush.
At some point a new group of organized criminals has either replaced or partnered with the "Republican Party." It seems this is partially for the Trump-aligned group to draw in votes and presumably corrupt or pressure the remaining "good guys" in the various government and political organizations.
Many of these moves and strategies make sense when viewed through the lens of organized crime shaking down companies, governments, private organizations, and such.
As to why they still have supporters - I can't really explain that aside from "they're hurting the right people."
When Trump says "America First" he means whatever is needed for America to "win". Lots of major tech leaders and people around him think the AI race with China is going to define the next 25-50 years some think this is "the race" as in whoever wins is going to be The Superpower full stop not for the next 50 year just forever.
With that on the line a lot of principles are just plain unimportant.
Hell even Democrats are falling inline behind him on China. D.C. seems to think this is a make or break moment for the long term success of the country.
An Arms Race isnt your regular race, its just running on a treadmill. There is no end, and the only thing you do is hope you dont collapse of exhaustion before your competition does. All the while, new competitors keep joining in.
If I recall, America was in a "make or break moment" back during the Cold War/Desert Storm/Iraq/etc. seems that we're still running...
If someone wanted American owned companies to compete (or win), they wouldn't take 20% top line revenue of products sold to China. They'd allow those companies to spend that money on R&D to continue to compete against Chinese AI companies.
One recent thing that isn't "America First", and doesn't help America "win", is that Trump blew up Canada trade negotiations because Canada decided to recognize the statehood of some distance nation in the middle east. Screwing up trade that affects everyone in America because of policy changes about things on the other side of the world doesn't seem focused on America. We only distance ourself from Canada and encourage Canada to do more trade with the EU and China; how does that help America?
The "let's just do whatever helps those in power gain more power" is a better match for what is happening.
> We only distance ourself from Canada and encourage Canada to do more trade with the EU and China; how does that help America?
I mean Canada doesn't really have the choice to do that. They are too dependent on America to really do much but just accept whatever we say. Maybe they can start reorienting themselves for a future in 10-20 years where they can meaningfully ramp up EU/China trade but for now they just accept whatever the USA says.
It's like when the last election was all "elbows up" then it turned out they had folded instantly and just hid it from their population.
In March Canada exports to the US decreased 6.6%, and their exports to other countries increased 25%. Canada's imports from America decreased 2.9%. Canada now exports more crude oil to China than it does to the US. There is now a strong social will and political will to reduce ties to the US and increase ties with other nations. This may take time, and it may not end the US, but it doesn't help the US by any means.
And why is this happening? "America First" means helping people that live in America; what part of this helps people living in America?
> When Trump says "America First" he means whatever is needed for America to "win".
When Trump says "America First" he means "Trump First". Insofar as this administration is concerned about winning a purported AI race, it's so that they can make money off of it. Trump views money collected by the government as his own personal slush fund, so this 10% of Intel is about him personally getting ownership of the AI race now. It has nothing to do with setting America up for the future, let's be clear.
I appreciated this comment. I really dislike Trump, but I try to steelman the opposing side to not fall into the "other party bad!" nonsense. But his recent actions have made it very hard to find a steelman, and it's been hard to resist feeling "the dude is a power-hungry narcissist". Your explanation makes a lot of sense as a steelman; thank you!
If you look only at Trump helping Intel, then yeah, that steelman makes sense.
But if you look at the affects of Trumps policies, such as stagnated manufacturing jobs, and huge uncertainty around tariffs, and Trump's willingness to blow up trade negotiations with Canada because Canada changed their policies about the middle east; just overall, Trump's not doing things that help us beat China.
We also see things like the US tends to reward those working in finance more than people working in engineering or just doing regular work. Income tax is higher than capital gains tax in America, this is a political choice we have made that rewards those who move money and capital around, but we give less reward to those who work or build things. Meanwhile in China they go out of their way to punish those in finance with government enforced caps on financial industry wages and such; they're trying to make sure their society is set up to reward engineering, building things, and regular work more than it rewards moving money around.
> Im confused over the state of ideology within the republican party at this point.
The ideology is whatever Trump says.
In a couple years when he's dead, they are gonna be seriously fuk't.
Yay.
> Can someone explain this ideological whiplash?
Yes. The party used to be conservative; now it's populist. They are two very different ideological positions. It changed under Trump. It's the same party in name, but a totally different ideology. Many traditional conservatives have gone along with it because the party still slashed taxes, which has been their main goal for a long time. They care much more about lower taxes than government ownership.
Slashed taxes but raised tariffs (aka import taxes).
There is no consistent ideology. There is only grift, and rage against anyone that they think wronged them.
Okay, there is ideology. But it's a bunch of different people with very different ideologies and goals.
Ah, the Soviet model of governance
Right, this is what's so amazing to me. The American conservative party spent the last 30 years taking a victory lap over the fall of the USSR, extolling the evils of socialism wherever they could, only to run in the opposite direction so hard, they ended up proving horseshoe theory by emulating everything that made the Soviets government dysfunctional.
The same guy who tried to overthrow the 2020 election despite claiming to defend the constitution, is now trying to take government control over corporations despite claiming to believe in capitalism. And you're confused as to why this is happening?
> Can someone explain this ideological whiplash?
You've misidentified the ideology. It's "might makes right" not "let's do capitalism".
I'm the same, they absolutely loathe Zohran Mamdani for talking about state run grocery stores, but getting involved in Intel is fine? What?
The cognitive dissonance is what blows my mind, this applies to almost every topic.
Borders? Well according to them borders are the most important thing ever, border security etc. Yet Ukraine? Well f** their borders, they're just something Putin can play with and that's totally fine according to them?
The ideology seems to be, "Whatever aligns with my or the great leaders world view, is good and I'll tell whatever stories I have to justify it to myself and others.".
Who are "they" and are they in the room with you right now?
Maybe the 70 million+ people who voted for this and continue to support this ideology?
Pretty sure they've jumped the ideological shark a long time ago at this point. Nothing is consistent. They say what's convenient for the situation. There are no ideals. People's attention spans are so short they don't notice, and if they do notice, most don't seem to care. You can find an infinite amount of tweets with these people contradicting themselves over and over again.