Earlier this month, Donald Trump demanded the resignation of Lip-Bu Tan, the Malaysian-American CEO of Intel, because of Tan’s personal investments in Chinese companies. Now we know what that threat was actually about, because Trump subsequently announced a deal that gives the U.S. government 10% of the microchip manufacturer’s shares.
CNBC reports:
Commerce Secretary Howard Lutnick said on Friday that the U.S. government has taken a 10% stake in embattled chipmaker Intel, the Trump administration’s latest effort to exert control over corporate America.
Intel, the only American company capable of making advanced chips on U.S. soil, said in a press release that 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. Intel noted that the price the government paid was a discount to the current market price.
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.
“The United States paid nothing for these Shares, and the Shares are now valued at approximately $11 Billion Dollars,” President Trump wrote in a post on Truth Social. “This is a great Deal for America and, also, a great Deal for INTEL.”
Note that Trump is using subsidies allocated by Congress under the previous administration—but doing so for his own aggrandizement and attaching strings to it that were never authorized by Congress.
Trump’s supporters are still issuing dire warnings about the threat of “socialism,” and Trump keeps using the Chinese government as an all-purpose boogeyman. Yet, ironically, he is adopting the distinctive policy of the Chinese Communist Party: extensive state ownership of nominally private businesses.
