The US government is aiming to acquire a stake in Intel by converting funding from the Chips and Science Act into equity. This initiative comes as Intel faces increased competition from companies like Nvidia. Howard Lutnick criticized the funding model of the Chips Act and questioned the benefits for taxpayers. The proposed equity stake would not grant the government governance rights. The overarching goal is to bolster domestic semiconductor production and reduce dependence on foreign sources, particularly Taiwan.
Lutnick emphasized the need for the US to secure semiconductor production domestically, stating, "We need to make our own chips here. We cannot rely on Taiwan."
Howard Lutnick criticized the funding structure of the Chips Act, questioning, "Why are we giving a company worth $100bn this kind of money? What is in it for the American taxpayer?"
The US government aims to convert funding from the Chips Act into equity stakes in Intel, indicating a shift from grants to investment for potential returns.
Intel’s shares saw a rally of 7.5% following the news of discussions with the US government about converting previously committed funds into equity.
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