Economy US to take 10% equity stake in Intel; more to follow

[Lead]

WASHINGTON, Aug 22 (Reuters) - President Donald Trump said on Friday the U.S. would take a 10% stake in Intel (INTC.O), opens new tab under a deal with the struggling chipmaker that converts government grants into an equity share, the latest extraordinary intervention by the White House in corporate America.
The deal puts Trump on better terms with Intel CEO Lip-Bu Tan, after the president recently said the CEO should step down due to conflicts of interest. It will ensure that the chipmaker will receive about $10 billion in funds for building or expanding factories in the U.S.

US to take 10% equity stake in Intel, in Trump's latest corporate move

President Donald Trump said on Friday the U.S. would take a 10% stake in Intel under a deal with the struggling chipmaker that converts government grants into an equity share, the latest extraordinary intervention by the White House in corporate America.

www.reuters.com

Surprised this wasn’t here yet. Looks like they got the equity but providing the CHIPs act funding that already was passed a few years back. All of this shadows strategic competition with China, but mimic some of Chinas economic approach in partially owning key companies.
This happened last around the 2008 bailouts but was meant to be temporary and eventually shares were sold off/ loans paid back. This is unique as I don’t think Trump is doing this as some type of temporary measure.

 

[Lead]

I’m hesitant even on bailouts but if they are done, it would be preferably a loan. I dont think this current example has good reasoning and hopefully the next guy just sells this off.

 

[HOLA]

I posted about it in my stocks thread, but I'm often just talking to myself in there:

Economy Thread 'Stocks thread v28: in loving memory of Rob Mafia and Brackis1'

May 22, 2024

Last thread: https://forums.sherdog.com/threads/stonks-v27-banks-the-kings-of-vega.4283065/

Time for a new one. Let's go.

• HOLA
• Replies: 1,210
• Forum: The War Room

• 

 

[ricc505]

I don't know enough to have a strong opinion. The government destroys almost everything it gets involved in though.

 

[Lead]

I don't know enough to have a strong opinion. The government destroys almost everything it gets involved in though.

New option added

 

[tastaylvr]

Do they pay tax on their earnings lol

 

[HOLA]

I don't know enough to have a strong opinion. The government destroys almost everything it gets involved in though.

The deal is structured to be passive ownership. U.S. government doesn't have governance rights or a board seat, and promised to (mostly) vote however the board wants.

That doesn't mean Trump or a successor couldn't unofficially pull some strings if they wanted.

Just a few days ago Trump was saying the CEO should be fired and there was no other solution.

August 7th the CEO was highly conflicted and must resign, immediately. No other solution.

August 11th the CEO was an amazing success story.

 

[heloder]

 

[HOLA]

Do they pay tax on their earnings lol

Nope.

When they took a stake it Citigroup in 2008, no taxes on any dividends they received. And any realized gains from the stock sale aren't taxed either.

They invested, iirc, like $45 billion into Citigroup and made close to $15 billion off of it. But then lost $11 billion with GM.

But the main goal is to stabilize a critical industry, not make a profit trading stocks. Or at least it was in 2008.

 

[Lead]

The deal is structured to be passive ownership. U.S. government doesn't have governance rights or a board seat, and promised to (mostly) vote however the board wants.

That doesn't mean Trump or a successor couldn't unofficially pull some strings if they wanted.

Just a few days ago Trump was saying the CEO should be fired and there was no other solution.

August 7th the CEO was highly conflicted and must resign, immediately. No other solution.

August 11th the CEO was an amazing success story.

Yea, in other words, likely was
8/7/25 Trump asks for equity in return for the CHIPs funds they were already expecting with the reply “uhhh what?”

8/11/25 CEO realizes Trump may do something drastic like pull the funds if they don’t go through with it

 

[avenue94]

I’m hesitant even on bailouts but if they are done, it would be preferably a loan. I dont think this current example has good reasoning and hopefully the next guy just sells this off.

The issue is there's no free market reason for Intel Foundry to survive, so it has to be nationalization or a consortium of tech at this point.

 

[HOLA]

Yea, in other words, likely was
8/7/25 Trump asks for equity in return for the CHIPs funds they were already expecting with the reply “uhhh what?”

8/11/25 CEO realizes Trump may do something drastic like pull the funds if they don’t go through with it

lol yeah it comes across like a Mafia Don doing shakedowns if you don't kiss the ring, for sure.

 

[cottagecheesefan]

I think this is fine, considering we were going to give them the billions anyways. At least get something in return, and some say in how they run things, rather than blindly giving the money. If their stocks go up, use the profits for paying off debt, fund other government investments and infrastructure, etc, that benefits tax payers who funded the grants

Wasn’t it also revealed recently that they were utilizing some CCP official or entity to manage something with our military?

 

[Lead]

The issue is there's no free market reason for Intel Foundry to survive, so it has to be nationalization or a consortium of tech at this point.

Is it unprofitable without the recent grants? I think the CHIPs act shows it doesn’t need to be nationalized. Trump seemed to leverage that with this.

Also, this thread deserved a @Deorum tag. That may be the wrong username

 

[44nutman]

Trump is a socialist!

 

[avenue94]

Is it unprofitable without the recent grants? I think the CHIPs act shows it doesn’t need to be nationalized. Trump seemed to leverage that with this.

Also, this thread deserved a @Deorum tag. That may be the wrong username

The grants are a drop in the bucket. IFS has lost about $25 billion in the last three years alone, and even though losses are going down revenue isn't coming in yet.

Ballpark number most analysts have to complete Intel's buildout is another $40 billion, give or take. As for nationalizing, I don't think fully doing so is good, but it's more of a signal to US tech that it's time to pony up and that there might be pressure to invest if you're a customer.

TLDR: There aren't many things more capital expensive or difficult than building cutting edge nodes and productizing them.

 

[Lead]

I think this is fine, considering we were going to give them the billions anyways. At least get something in return, and some say in how they run things, rather than blindly giving the money. If their stocks go up, use the profits for paying off debt, fund other government investments and infrastructure, etc, that benefits tax payers who funded the grants

Wasn’t it also revealed recently that they were utilizing some CCP official or entity to manage something with our military?

Blindly giving is pretty inaccurate. The grants are tied to a ton of different rules which actually we’re taking a long time to process before this and a criticism of the bill or at least bureaucracy afterwards handling. So the exact opposite.

And the “some say in how they run things”, do you think public officials would do a better job managing these type of companies?

Whatever the CCP official thing is, that can be handled in the form of laws, investigation, fines. No ownership required.

 

[Lead]

The grants are a drop in the bucket. IFS has lost about $25 billion in the last three years alone, and even though losses are going down revenue isn't coming in yet.

Ballpark number most analysts have to complete Intel's buildout is another $40 billion, give or take. As for nationalizing, I don't think fully doing so is good, but it's more of a signal to US tech that it's time to pony up and that there might be pressure to invest if you're a customer.

TLDR: There aren't many things more capital expensive or difficult than building cutting edge nodes and productizing them.

Ah, got it. I wasn’t really a fan of the bill initially and it hasnt seemed to accomplish the intended goal. I remember seeing some analysis like what you’re saying in order to truly break into the industry and it was massive with little additional market share. I’m not that close to the details of it though. I still don’t see the need for partial ownership though.

 

[cottagecheesefan]

And the “some say in how they run things”, do you think public officials would do a better job managing these type of companies?

Maybe not other admins, especially Biden’s, but trumps is full of successful business people, some even from tech. So I do trust them

 

[Lead]

@avenue94
Private investment has been larger. Is that significant or had to gauge as there aren’t necessarily guaranteed commitments to actually make the investments?