Tech Giant’s new stock aims to increase production of US semiconductor chips.
US Sen. Bernie Sanders has cast his support on US President Donald Trump’s plan to turn US grants into government funding to chipmakers that include Intel’s $10.9 billion.
The Vermont Senator announced his support Wednesday.
“If a microchip company benefits from generous grants received from the federal government, US taxpayers are entitled to a reasonable profit on their investment,” an independent Sanders, who works with Democrats, said in a statement to Reuters.
The award was part of the Chips and Science Act of 2022, which sought to seduce chip production from Asia and boosted America’s domestic semiconductor output with a $39 billion subsidy.
The acronym chip in the name of the law stands for “creating useful incentives to generate semiconductors.”
U.S. Secretary of Commerce Howard Lutnick is considering a government that takes equity stakes from Intel and other chipmakers in exchange for grants as the Trump administration seeks “fairness” in exchange for “investment.”
Rarely bipartisan
The extraordinary alignment between Sanders and Trump regarding private-company government ownership underscores Trump’s significant changes to the policies of state intervention in the economy, usually associated with the left.
Since Trump took office for the second time in January, he has agreed to allow AI Chip Giants Nvidia and AMD to sell AI Chips to China in exchange for the US government, which has received 15% revenue from sales.
The Pentagon will also be the largest shareholder of a small mining company to increase production of rare earth magnets. And the US government negotiated certain veto and “golden shares” as part of a deal that would allow Nippon Steel to purchase US steel.
Democrat Sanders and Sen. Elizabeth Warren had proposed amendments to the Chips Act, which prohibited the Commerce Department from granting the Chips Act award without the Treasury Department receiving warrants, equity stakes or senior debt certificates issued by the recipients.
“I’m happy the Trump administration agreed to the amendments I provided three years ago,” Sanders said. “Taxpayers shouldn’t provide billions of dollars of corporate welfare to large, profitable companies like Intel in return.”
Chips’ fundraising has been awarded recipients such as Micron, Taiwan Semiconductor Manufacturing Co, and Samsung.
Trump’s interest in Intel is also driven by his desire to boost chip production in the US, which was the focus of the trade war he has been fighting around the world. By reducing the country’s dependence on chips manufactured overseas, the president believes the US will be in a better position to maintain China’s technical lead in the race to create artificial intelligence.
Earlier this month, Trump called on Intel CEO Lip-Bu Tan to step down.
This demand was sparked by reports raising national security concerns about Tan’s past investments in Chinese high-tech companies while he is a venture capitalist. But Trump then retreated to see Tan telling his Intel employees his loyalty to the US and heading back to the White House to meet with the president.
This comes during consultations with other large investors a few days after Chipmaker received a $2 billion capital injection from SoftBank Group, according to CNBC, to receive a discounted stock injection with other large investors.
On Wall Street, investors are less responsive to the potential new role of government. Intel shares fell 7.1% from the market as of 1:30pm (17:30 GMT) in New York.
