The US government wants a 10% stake in Intel in return for that CHIPS act cash

If you recall, yesterday we mentioned that the Trump administration was considering a 10% stake in poor old, beleaguered Intel. Now it turns out that the mooted investment won't strictly be in return for new money. Instead, Trump wants the 10% stake as part of the CHIPS Act deal inked under the previous Biden administration.

In an interview with CNBC yesterday, Commerce Secretary Howard Lutnick said Intel must give the US government an equity stake in the company in return for those CHIPS Act funds.

"We should get an equity stake for our money," Lutnick said, "so we'll deliver the money, which was already committed under the Biden administration. We'll get equity in return for it."

"The Biden administration literally was giving Intel money for free and giving TSMC money for free, and all these companies just giving the money for free, and Donald Trump turned it into saying, 'Hey, we want equity for the money. If we're going to give you the money, we want a piece of the action for the American taxpayer'," Lutnick also said.

That mirrors comments from White House press secretary Karoline Leavitt. "The president wants to put America's needs first, both from a national security and economic perspective, and it's a creative idea that has never been done before," she said. Reuters also claims that Secretary Lutnick implied that the government wanted non-voting shares, thus preventing direct interference with Intel's operations.

This is all quite a departure from earlier comments from President Trump, calling the CHIPS Act a "horrible thing." But it does arguably make at least some sense. There's a legitimate question to be asked as to why a large corporation, even one as strategically important as Intel, should simply be given taxpayer money.

Moreover, whatever the Trump administration's intentions with all this, ensuring that the average taxpayer ends up with something in return for sending billions of dollars Intel's way does seem more progressive than simply handing over the money. If the effort to revitalise Intel with public money does work, that stake can then be sold at a later date, partially or wholly recouping those funds, or perhaps even realising some kind of return.

There is, of course, the broader question of the wisdom of government ownership of commercial assets. Perhaps fears of being accused of trying to nationalise the chip industry discouraged the Biden administration, which instituted the CHIPS Act in the first place, from insisting on an equity stake in return for the funds.

Whatever, it's certainly momentous times for Intel. Just five years ago, the idea that the US government was intending to take a 10% stake in the company would have seemed extraordinary, if not bizarre. But here we are.