Bernie Sanders backs Trump’s plan to buy stake in Intel

Trump vowed to kill CHIPS Act. Instead, he’s found a way to salvage it.

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[hillspuck]

The US government will now be invested in Intel's success, and at odds with anyone coming along to compete with them.

 

[gijames1225]

I'm against corporate welfare, so if a company really, really needs the cash, I'm onboard with taxpayers at least getting some stock / potential profit out of it.

It still pisses me off that we accumulated so much public debt during the covid bailouts and have absolutely nothing to show for it. All of that should have been done (if it was done at all) with the government getting stock that it could at some point profit or at least recoup expenses from.

 

[Emotion_ology]

My god people are gullible. You’re reading a headline from a bunch of cruel, immoral, corrupt liars and saying “oh well that sounds like a good idea let’s trust him to be on the level this time.”

The reason the government doesn’t take equity in return for grants is because it’s a government, not a business. Grants are created in the first place because it is deemed to be in the interest of the nation or its people that some particular endeavor succeed/be affordable/whatever. That’s what a grant is for. Good grants build the economy, stabilize infrastructure, extend services… that’s what the government and the people get out of it. The moment this government starts placing a direct profit incentive to give grants, its motives are corrupt and it’s no longer doing its job. But maybe I’m wrong and venture capitalists have been fighting enshitification this whole time…

obviously that’s drastically oversimplified. But come on folks, stop trusting con artists when they tell you about this great investment opportunity.

 

[Jackattak]

Now do the same for ISPs/telecoms that take grants and don't build out their networks.

Cars. Also also cars.

 

[quamquam quid loquor]

So the thing that sounds like socialism is supported by a well known socialist? Tracks.

Market Socialism is a terrible idea. Republicans gave Obama a ton of shit for supporting zombie companies like Solyndra, which was just a FFB loan/DOE loan guarantee. Solyndra is like a 2/10 on the government intervention scale and this is a 7/10.

Government ownership of Intel is an absolute disaster. In the best case, you save Intel at the expense of other more efficient companies like AMD/NVIDIA. In the worst case, Intel goes under because it takes the government poisoned money and now supports non-economic outcomes the government as a major shareholder wants.

Look at Old Space vs New Space. Old Space is a jobs program to get government funds. Do you want to see Intel make terrible hiring decisions just to get the next round of government funds? Eventually we will own the entirety of Intel and be saddled with funding it and the associated government jobs in perpetuity.

 

[sword_9mm]

Well, at least there's a ROI for taxpayers. Too bad we don't look at social safety net programs the same way. Taxpayer money should be spent to help everyone, not just a few rich guys who kiss the right asses.

Too bad that's never been how any of this ever worked.

 

[Emotion_ology]

Generally, a 10% equity interest in a business does not give a party the right to "run the business". if you want to have full control over a company, you need to own 50%+1 of the voting shares such that you're able to appoint the entire board of directors yourself.

It's not even clear from this plan that the US government will be acquiring voting shares at all. You can acquire an equity interest in a company through non-voting shares and get little to no say in the operation of the business. Holding 10% of the voting shares in a company like Intel will give you a meaningful say in the election of the board and any matters that require shareholder approval, but will not allow you to "run the business" or give you anything like total control or private ownership.

Yes, that’s how the rules are written. What in Trump’s history makes you think he’s going to follow those rules?

 

[dnorman]

I wonder how long it will be before someone launches a new chip fab company and files a suit that they aren't getting investment from the US gov…

 

[TimeToTilt]

Because it's picking winners and losers. Something Republicans have absolutely lost their shit about repeatedly. Remember Solyndra? Or the GM bailout? Now something that was previously an unimaginable evil is OK because a Republican is doing it?

The whole idea of one set of rules and laws for Democrats and a completely different set of rules and laws for Republicans needs to go die in a fire. Yeterday.

Unfortunately it did. Now the idea is one set of rules and laws for Democrats and no rules or laws for Republicans.

 

[IronTek]

Great! Now let's do the same thing for all of the medical research we hand off to the drug companies!

 

[gijames1225]

My god people are gullible. You’re reading a headline from a bunch of cruel, immoral, corrupt liars and saying “oh well that sounds like a good idea let’s trust him to be on the level this time.”

The reason the government doesn’t take equity in return for grants is because it’s a government, not a business. Grants are created in the first place because it is deemed to be in the interest of the nation or its people that some particular endeavor succeed/be affordable/whatever. That’s what a grant is for. Good grants build the economy, stabilize infrastructure, extend services… that’s what the government and the people get out of it. The moment this government starts placing a direct profit incentive to give grants, its motives are corrupt and it’s no longer doing its job. But maybe I’m wrong and venture capitalists have been fighting enshitification this whole time…

obviously that’s drastically oversimplified. But come on folks, stop trusting con artists when they tell you about this great investment opportunity.

I think we are all aware of what a grant is and why they exist.

I also just happen to think that if the efforts to save Intel would be more ethical if they happened as an investment and not as a big, blank check.

If anything, I think the goals of the CHIPS Act would probably be best worked toward with a combination of grants and investments. The Intel bit is, sadly, risky enough, that I think investment makes more sense. For TSMC it's sensible to just do as a grant because I'm fairly confident that they will still be fabbing chips in the US with that money a decade from now.

I guess it's almost a little odd to me that you would rather the government get nothing in return for the money it gives to Intel instead of at least getting some stock out it, just because Trump is in favor of the idea. To me, that seems like you are less concerned with rationality than you are with never agreeing with Trump (to be fair, the two goals are overwhelmingly in agreement though).

 

[Sajuuk]

Market Socialism is a terrible idea. Republicans gave Obama a ton of shit for supporting zombie companies like Solyndra, which was just a FFB loan/DOE loan guarantee. Solyndra is like a 2/10 on the government intervention scale and this is a 7/10.

Government ownership of Intel is an absolute disaster. In the best case, you save Intel at the expense of other more efficient companies like AMD/NVIDIA. In the worst case, Intel goes under because it takes the government poisoned money and now supports non-economic outcomes the government as a major shareholder wants.

Look at Old Space vs New Space. Old Space is a jobs program to get government funds. Do you want to see Intel make terrible hiring decisions just to get the next round of government funds? Eventually we will own the entirety of Intel and be saddled with funding it and the associated government jobs in perpetuity.

If this is what we're defining as "Market Socialism," well, it's demonstrably working out for China.

 

[Snowball in Hell]

so the government would be receiving profits from Intel to fund anti-science, anti-education, fascist policies?

Ooooh I am definitely going to rush out to support that company.

 

[stk5]

People write off Trump on a lot of things and have a visceral reaction to pretty much everything he says because that hole is rotten. In this case I'm agreed - the American people are giving these companies boatloads of money, we might as well get a return. Why is it always socialize the losses but privatize the profits?

Then it should've been part of the law that was passed, or a new law adding to the it, not via whatever the executive branch is doing. There was already precedent for this kind of thing with TARP, which also got the government a profit (and of course now that Trump is involved, it's a suddenly a totally unique and creative idea never before seen).

Aside from whether the above is a good idea, the goal of CHIPS was to get investment and jobs inside the USA, and not just do a financial transfer like TARP, so it's not like it is literally giving money away for nothing. Lutnick's claims there are just BS — there's a clear social benefit to adding jobs.

 

[quamquam quid loquor]

It is better for Intel to go bankrupt. This will allow them to shed their debts and have a US company buy the underlying assets and assume the employees.

Let another US tech giant buy it for pennies on the dollar and pour real investment into it after all the existing shareholders and bondholders get wiped out.

 

[JoHBE]

"While Lutnick gave Trump credit for coming up with what White House Press Secretary Karoline Leavitt described as a "creative idea that has never been done before" to protect US national and economic security, it appears that Lutnick is driving the initiative."

It takes a special personality type to keep up this extraordinarily humiliating level of ass-kissing without losing the last shred of self-respect in your mind and body. Maybe they removed all mirrors at home, so they don't have to look into it in the morning? Or is it simply faulty brain wiring?

 

[Riddler876]

People write off Trump on a lot of things and have a visceral reaction to pretty much everything he says because that hole is rotten. In this case I'm agreed - the American people are giving these companies boatloads of money, we might as well get a return. Why is it always socialize the losses but privatize the profits?

Your problem is big companies like intel get a lot of money from many governments. Germany offered to subsidise intel to the tune of 10 billion+ if I recall correctly a few years ago. The EU wants it's own chip factories. What happens when germany demands a 20% stake? And then the rest of the EU demands their percentage? It's an absurd plan that gets out of control very quickly.

 

[SaturnSky]

Bernie is wrong and so is Trump. Before, under CHIPS, money granted had to go to fund capital expenditures. Effectively it had to be used building clean rooms or buying tooling for deployment in the US. Now, the money is going to go for share buybacks and bonuses for Executives and the board.

In principle, I think buying equity and companies instead of giving the money is great. But by giving Intel money to buy semiconductor tooling, you ensure that either Intel would use the acquired equipment for semiconductor manufacturing, or there would be a supply of cheap tooling in the US if Intel failed - so either way, the money goes to support semiconductor production in the US.

Now, no tooling will be purchased, and Intel will not spin off the fabs which is the only viable way for leading edge node production to continue operating in the United States, and the price of semiconductors will rise as a result. Basically this money is being spent to fund a price increase for all semiconductors. I’m really disappointed Bernie is too stupid to see that.

This is a price support for Intel’s crappy products, because Intel’s board has utterly failed to respond to the market dynamics. Trump is an idiot. Anyone who supports this is actively trying to harm the US semiconductor industry.

I'm not sure of Bernie's motives here but suspect that he supports it because it gets CHIPs Act money flowing.

Agree that this is not a wise way to do this, but it does free up funds that this administration locked up. It should be noted that the president has only very limited authority over spending and in this case as in others, it is illegal to stop spending congress already authorized. Due to Project 2025 shock and awe, states, orgs and businesses may not have gotten their legal bearings yet. Businesses are in a particularly precarious position taking on legal challenges like this because they risk getting on enfant terrible's radar.

It should also be noted that Intel spent something like a HUNDRED BILLION dollars on stock buybacks during a period where they also told customers like Apple to take a hike. Intel is now circling the drain as fast as Motorola did some 25 years ago. Giving Intel money at this stage may already be too late. This money could be better spent across the rest of US semi's. On the other hand, giving CHIP's money to Samsung and TSMC is ridiculous. Both of those companies already have state sponsors and they are very capable of extracting tax concessions from Arizona, Texas and Washington and any other state they want to build in.

 

[black_box]

...The moment this government starts placing a direct profit incentive to give grants, its motives are corrupt and it’s no longer doing its job. But maybe I’m wrong and venture capitalists have been fighting enshitification this whole time…

I can't wait for the federal government to start expecting a share of the tolls on expressways and bike paths funded at least in part by federal grants.

The benefit of the grant is not limited to the profit the company, but also included having the ability to make and design chips in the US, employing all those people, keeping an industry with an evolving technology in the US so we aren't shut out later.

 

[scrimbul]

I remember the old days -- a year ago -- when this would be denounced as communism. What's happened to the voices screeching about the Free Market?

Because, and this is common:

Depending on polling weasel-wording voters generally support liberal or democratic socialist policies but do not trust Democrats to do the implementation.

Fair or not, this is the reality, even if 'trusting Democrats on implementation' was literal decades of prior sabotage from the GOP.

Democratic leadership is not only paralyzed on exactly what to do about this but discovering they've had a voter registration crisis in at least 30 states going back all the four years of Biden's tenure.

The GOP has also been playing bad faith for so long that it's difficult to take commenters of ex-Democratic voters spouting Trumpist talking points seriously as rationale for vote switching. That muddies the waters when voter feedback from voters switching away from the Democratic Party isn't credible, especially when they know full well in many if not most cases deportation is murder, making them complicit beyond the COVID-19 casualties for upending and cutting short the lives of the deported, whether that's imprisonment in foreign countries or death.

The conclusions to draw from all that is an exercise for the reader, if a voter loves the Democratic Party platform but resents the Democratic Party leadership to the extent they would rather straight up vote to have people killed, women and prisoners enslaved, and inflation rise. (the vote switchers' and Trump voters' intents don't matter here, only the results)

 

[Emotion_ology]

I'm against corporate welfare, so if a company really, really needs the cash, I'm onboard with taxpayers at least getting some stock / potential profit out of it.

It still pisses me off that we accumulated so much public debt during the covid bailouts and have absolutely nothing to show for it. All of that should have been done (if it was done at all) with the government getting stock that it could at some point profit or at least recoup expenses from.

What do you mean we have nothing to show for it?

Firstly, who is “we”? Do you somehow get a check if the government has equity in a private company? An awful lot of Americans still have homes and jobs and businesses because of how the government handled things. So many Americans have lots to show for it.

But assuming you mean the Government… our economy recovered faster and more robustly than most of the rest of the world. Governments make money from taxes. This means that preserving and growing the economy is how the government makes money. The government takes in much more in tax revenue now than it did in 2020.

Sounds like you’re either complaining because you don’t have certificate of ownership to hang on your wall, or because you feel like you’re a shareholder of the U.S. government and they owe it to you to maximize quarterly profits at the cost of long term planning.

 

[Emotion_ology]

It takes a special personality type to keep up this extraordinarily humiliating level of ass-kissing without losing the last shred of self-respect in your mind and body. Maybe they removed all mirrors at home, so they don't have to look into it in the morning? Or is it simply faulty brain wiring?

Nah, it’s just longer-term thinking. Giving Trump credit publicly means he can walk around stroking his own ego about how clever his plan is and no one in his orbit can safely disagree. The people who matter know whose idea it was.

 

[dikbozo]

So how long until some tantrum or other turns this "plan" into chaos?

Need you ask?
2 weeks.
As is tradition.

 

[Emotion_ology]

I think we are all aware of what a grant is and why they exist.

I also just happen to think that if the efforts to save Intel would be more ethical if they happened as an investment and not as a big, blank check.

If anything, I think the goals of the CHIPS Act would probably be best worked toward with a combination of grants and investments. The Intel bit is, sadly, risky enough, that I think investment makes more sense. For TSMC it's sensible to just do as a grant because I'm fairly confident that they will still be fabbing chips in the US with that money a decade from now.

I guess it's almost a little odd to me that you would rather the government get nothing in return for the money it gives to Intel instead of at least getting some stock out it, just because Trump is in favor of the idea. To me, that seems like you are less concerned with rationality than you are with never agreeing with Trump (to be fair, the two goals are overwhelmingly in agreement though).

See, if we all were aware what a grant is and why it exists, we wouldn’t also have people saying the government is getting nothing in return for its money.

 

[dikbozo]

Ok, so state directed capitalism? Which party was in charge again?

The Capitalist party.
Oh I forgot, both of them are under that umbrella.

 

[MidnightHacker]

It’s not governance, we’re just converting what was a grant under Biden into equity for the Trump administration, for the American people,” Lutnick told CNBC.

That’s how I read it.

 

[dikbozo]

I'm against corporate welfare, so if a company really, really needs the cash, I'm onboard with taxpayers at least getting some stock / potential profit out of it.

It still pisses me off that we accumulated so much public debt during the covid bailouts and have absolutely nothing to show for it. All of that should have been done (if it was done at all) with the government getting stock that it could at some point profit or at least recoup expenses from.

Considering the down vote trend as I write this, I remind you that IIRC GM and Ford had handouts in exchange for dollars in the Great Recession. Might have been a Canadian thing, but I seem to remember the govt involved made out quite well.

 

[Bash]

What the hell do you mean now? Intel has spent over a hundred billion dollars on buybacks over the last ~30 years.

This is key here -- as a society we need to incentivize long term growth rather than short-term stock price manipulation.

 

[wrecksdart]

It takes a special personality type to keep up this extraordinarily humiliating level of ass-kissing without losing the last shred of self-respect in your mind and body. Maybe they removed all mirrors at home, so they don't have to look into it in the morning? Or is it simply faulty brain wiring?

Probably all of the above.

 

[rawToe]

None of this makes sense until Senators and Congresspeople are forced to divest from financial trading. Lobbying post-term is lucrative enough.

and term limits. someday.

 

[dikbozo]

I wonder how long it will be before someone launches a new chip fab company and files a suit that they aren't getting investment from the US gov…

On the one hand, launching a chip fab requires Billions and Billions of dollars and a good 10 years to build. Not exactly a thing that happens over night. Possibly this might make some sense beyond that 10 year window, but right now, not so much.

 

[tipoo]

The US government will now be invested in Intel's success, and at odds with anyone coming along to compete with them.

I would only put forward the obvious question - who is that?

TSMC is the market behemoth, not American, and only came in with certain fabs with the promise of large government funding for them to do so. Samsung is the same and also a distant second.

There's no other American game in town, and Intel is down bad on fabs. TSMC also receives a lot of direct support from the government of Taiwan.

 

[wrecksdart]

I remind you that IIRC GM and Ford had handouts in exchange for dollars in the Great Recession. Might have been a Canadian thing, but I seem to remember the govt involved made out quite well.

"Quite well" in that it kept the companies afloat, not well in that the government lost ~$11B on the "investment": https://apnews.com/govt-report-says-us-lost-11-2b-on-gm-bailout-3cf9188da0a64f73b91259e9309f0003

 

[johnnoi]

People write off Trump on a lot of things and have a visceral reaction to pretty much everything he says because that hole is rotten. In this case I'm agreed - the American people are giving these companies boatloads of money, we might as well get a return. Why is it always socialize the losses but privatize the profits?

Any investment into Intel is likely to be a loser.

 

[dikbozo]

I can't wait for the federal government to start expecting a share of the tolls on expressways and bike paths funded at least in part by federal grants.

The benefit of the grant is not limited to the profit the company, but also included having the ability to make and design chips in the US, employing all those people, keeping an industry with an evolving technology in the US so we aren't shut out later.

Coming right up.
This is the administration of grifters, for grifters, by grifters, after all. And no one loves a good grift better than a fellow grifter.

 

[TechnicaGratiaArs]

Socialism is essentially the government owning the means of production. Trump's policy is totally socialist, 10% ownership of the US means of producing advanced chips and many other semiconductors (and other tech).

Meanwhile he will continue to try to burn as witches Democratic Socialists AOC and NYC mayoral candidate Mamdani, while his zombie cult lights their torches and chants in unison with the disinfo feed.

I've seen a lot of Republican cognitive dissonance, but this one proves its cult is completely past even recognizing logical, factual consistency. It's nothing but the god emperor's word is law.

 

[dikbozo]

"Quite well" in that it kept the companies afloat, not well in that the government lost ~$11B on the "investment": https://apnews.com/govt-report-says-us-lost-11-2b-on-gm-bailout-3cf9188da0a64f73b91259e9309f0003

It must have been the Canadians who made a bit then. Old Man Time and these times causes my memory to be fuzzy.

 

[Waco]

For Intel, the "highly unusual" deal that Trump is mulling now could help the struggling chipmaker compete with its biggest rivals, including Nvidia, Samsung, and TSMC, BBC noted.

I disagree with this whole process (especially because the grant money wasn't just "given away for free", there were stipulations to receiving it) but am I the only one that found it odd that there was no mention of AMD here? Intel isn't (and hasn't been) just about its fabs in a long time. AMD is eating their lunch in many markets.

 

[Zubenelgenubi]

So... given intels market cap how much will 10b increase the price? Should I be buying INTC... guess I need wallstreetbets

This “deal” sounds like it will be Intel issuing new, non-voting, equity in return for the Chips money. The government is not buying existing shares on the open market. As such, it should lower the price for existing shares since presumably the new shares will be entitled to a share of profits.

 

[Dputiger]

Bernie is wrong and so is Trump. Before, under CHIPS, money granted had to go to fund capital expenditures. Effectively it had to be used building clean rooms or buying tooling for deployment in the US. Now, the money is going to go for share buybacks and bonuses for Executives and the board.

In principle, I think buying equity and companies instead of giving the money is great. But by giving Intel money to buy semiconductor tooling, you ensure that either Intel would use the acquired equipment for semiconductor manufacturing, or there would be a supply of cheap tooling in the US if Intel failed - so either way, the money goes to support semiconductor production in the US.

Now, no tooling will be purchased, and Intel will not spin off the fabs which is the only viable way for leading edge node production to continue operating in the United States, and the price of semiconductors will rise as a result. Basically this money is being spent to fund a price increase for all semiconductors. I’m really disappointed Bernie is too stupid to see that.

This is a price support for Intel’s crappy products, because Intel’s board has utterly failed to respond to the market dynamics. Trump is an idiot. Anyone who supports this is actively trying to harm the US semiconductor industry.

I can see why you might think this, but the US government taking a 10% stake in Intel isn't going to magically fix the problems facing Intel. Intel will only fix those problems if it fixes its process nodes for its own hardware and finds ways to create an attractive platform for future foundry customers.

And given the national security angle behind this kind of arrangement, it's still in Intel's best interests to try to solve those problems rather than exclusively investing in stock buybacks.