American taxpayers are now the biggest shareholders of Intel. What comes next is not so clear.
The Trump administration announced Friday that the Government had taken a 10% stake in the California computer chips manufacturer, which has been left behind the Nvidia and AMD rivals in the artificial intelligence career. In the last five years, the price of Intel shares has decreased more than 50%.
The Administration has not provided any detail about when or under what circumstances would sell Intel’s actions, or if it would sell them at all. Nor did he say if the United States would benefit from some dividends, although Intel has not paid any since last year. The administration does not plan to take any seats on the Board and has said that it will only vote against the company in “limited” circumstances.
While the Secretary of Commerce Howard Lutnick suggested on Friday that national security was a key motivator to take participation, on Monday, Trump focused more on the possibility of financial profits.
“I will make deals for our country throughout the day,” Trump said in a publication about Truth Social. “I love to see that the price of its shares increases, which makes the United States richer and richer. More jobs for the United States!” Added.
Intel shares have risen about 4% since the transaction was announced. Some experts said that although there is an upward potential in the agreement, it represents another expansion of the presidential authority of the rules in the business world, and probably not the last one.
The Trump administration has already taken a “golden participation” in the Nippon Steel of Japan as part of an agreement that grants the approval of the supply of that company by American steel, and giving the government a voice in future transactions of Nippon. Last month, the Pentagon announced that it had bought $ 400 million in MP Mine materials from Rare Earth, which makes it the largest shareholder of the company. The White House also plans to take a cut of sales that chips manufacturers Nvidia and AMD make to China.
Trump told journalists on Monday that he hopes to see “many more” offers like Intel’s, and added that no one “realizes how good it will be.” Kevin Hasett, director of the Trump National Economic Council, said that similar agreements could help form the basis of a sovereign wealth fund, an idea that the administration had previously floated as a way of giving us taxpayers of direct participation in companies, but had not yet been completely developed.
“At some point there will be more transactions, if not in this industry, in other industries,” said Hasset in CNBC.
The participation of the United States in Intel does not equal a complete acquisition of the government. Although the federal government has assumed the total control of private corporations before, such incidents have generally arrived in times of crisis, and not with the direct intention of trying to play markets.
“He is doing all this in a spooky and controversial way,” said Clyde Wayne Marks, a member of regulatory studies in the competitive Enterprise Institute, a group of libertarian experts. “At this time there is no crisis.”
President Woodrow Wilson nationalized railways, as well as telegraph stations, telephone, radio and wireless during World War. Almost two decades ago, the Government rescued a large number of private companies during the global financial crisis of 2008-2009.
While the rescue meant maintaining corporate assets in the Books of the US government. UU. With the aim of returning profits to taxpayers, there was never a serious intention to possess them in the long term. And a study of the government’s responsibility office concluded in 2023 that the program finally reached a net cost of approximately $ 31 billion.
The United States government has long provided subsidies to private corporations in the form of loans and subsidies, to varying degrees of success. Two high profile examples occurred during the Obama administration, when the energy department provided loans to a solar energy company called Solyndra and the Tesla electric vehicle manufacturer. Solyndra finally declared bankruptcy, while Tesla is worth $ 1.2 billion in the stock market.
Some have argued that the United States would have benefited from having taken a participation in Tesla. However, at that time, Tesla received the loan, in 2010, beliefs about the free market and the need to limit the role of government in it prevailed not only among Republicans, but also among the Democrats, experts say.
“Our system has not generally been built in that way, it is not how the free company is executed,” said Dan Reichr, former official of the Department of Energy under the presidents Clinton and Obama. “History has shown that the most free market approach, which makes the final result the final result for companies that execute these operations, is a smarter path.”
Intel’s investment occurs when the company’s fortunes have sunk. His manufacturing segment lost $ 3.2 billion in the second quarter, and in July he said he would fire 15% of his workforce at the end of the year while canceling billions of planned investments and delayed the completion date of a $ 28 billion file plant near Columbus, Ohio.
In a presentation of values on Monday, Intel warned investors about the potential risks involved in US investment, including that the agreement can actually limit the company’s capacity to ensure subsidies in the future, depending on their future performance. It could also damage international sales and make it subject to additional regulations and restrictions, both at home and abroad, said Intel.
On Monday, Trump asked if Intel’s investment represented a new way of making an industrial policy.
“Yes. Surely it is,” Trump said. “I want to try to get everything I can.”
