Report: Trump Administration in Talks to Buy Stake in Intel to Produce High-Tech American Jobs

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Report: Trump Administration in Talks to Buy Stake in Intel to Produce High-Tech American Jobs

The Trump administration is reportedly in discussions to buy a stake in beleaguered chipmaker Intel to help shore up the company's delayed factory project in Ohio, according to people familiar with the plan.

www.breitbart.com

The Trump administration is reportedly in discussions to buy a stake in beleaguered chipmaker Intel to help shore up the company’s delayed factory project in Ohio, according to people familiar with the plan.

 

[Margery]

Generally govt doesn't do as well as private owners in business operations. My province has lost a ton of money doing that but hopefully that will just be a short term measure otherwise it gets into the socialist model of govt owning business and making politically correct decisions on business matters which don't always translate to profits.


That goes double for firms that are barely managing as it is before govt help. The reasons for a company doing poorly are not always visible to the bureaucrats now running the place and if the pros had trouble, the govt sure has more trouble.

Also not good for the healthy businesses trying to compete as govt business uses tax dollars to undercut the competition and eliminate it. Or in other words how my province killed good cheap auto insurance.

 

[Tall Timbers]

I just did some figuring with regards to intel's market capitalization. If it's 11 billion they're gonna get from the Federal govmint, then the govmint is getting a piece of intel at it's current low capitalization, it ti's getting a full 10% ownership stake... It seems like a good deal for the govmint, not so much for existing shareholders.

 

[Tall Timbers]

Government's Intel stake highlights risks of 'deals-based capitalism,' former Treasury Secretary says​

Former Treasury Secretary Larry Summers expressed skepticism over the US government's decision to take a 10% equity stake in Intel (INTC), warning that the move reflects a troubling shift in how economic policy is being carried out.

The stake comes as Washington steps up efforts to boost the domestic semiconductor industry. While Summers acknowledged the logic of public funds supporting struggling companies, he cautioned that the Intel deal fits into a broader — and, in his view, problematic — pattern.

"It comes as part of a general approach to [economic] policy, what you might call deals-based capitalism rather than rules-based ... capitalism," he said.

Summers argued that a rules-based approach, where companies compete under consistent standards rather than striking case-by-case deals with regulators, is more conducive to long-term growth and market stability.

https://finance.yahoo.com/news/governments-intel-stake-highlights-risks-of-deals-based-capitalism-former-treasury-secretary-says-191116741.html

I pretty much agree with what Summers says in this article rules based vs deals based capitalism. Trump is creating precedent that our enemies will use to full advantage once they're in power again.

 

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I just did some figuring with regards to intel's market capitalization. If it's 11 billion they're gonna get from the Federal govmint, then the govmint is getting a piece of intel at it's current low capitalization, it ti's getting a full 10% ownership stake... It seems like a good deal for the govmint, not so much for existing shareholders.

On the upside i would understand because of the level of danger in exposure in the semiconductor industry (AI worldwide etc), it does make sense on one level for government to be a part of the revamping of a major industry leader. Because on that note what i would factor in is an edge up on American power in the semiconductor industry (even with attitude) as a way of saying something to the world in general. Not just in vain positioning. But in being a backbone behind real semiconductor infrastructure moving forward.

In a post apocalyptic sense of sorts (in the sense of America having been robbed blind and left to a degree in the dust bowl waste land of hasbeen like economically and politically raided like stature--even left to face unreasonably harsh economic and political elements--i.e. having left to hang out to dry a bit by decades of far left eroding policy and procedure), America, as kind of pealing herself off of being charred and flayed steam-pressed even into her a shadow of her former self (in that the globalistic side-swiping economic and political head games had come into play upon us), having marketing edge in the semiconductor world as a means of realigning I don't believe is absolutely uncalled for.

On the negative side, yes TT, i would agree our enemies would use this sort of thing though against us. And true or not true, it does feel like the genes of America are mutating a bit in approaching the business sector this way. Wiser ways to promote free market trade and competition would always seem to be pf course better, amen. Blessings.

 

[Andiamo]

I didn’t read much but is this setting a precedent? This isn’t sitting right with me at all. I understand however why this may be necessary, because we need to improve our ability to manufacture computer chips here and get away from China.

 

[Hol]

I don’t understand big tech business, but I remember when the US bailed big banks out in 2008. We should have gotten shares from them.

One interesting leverage is that the Trump admin was able to have US chip manufacturers produce an inferior product for China.

Howard Lutnick’s ‘insulting’ remarks about Nvidia’s H20 chips irk China: report​

Chinese officials are miffed over Commerce Secretary Howard Lutnick’s “insulting” remarks about Nvidia’s H20 computer chip — and are now pressuring domestic firms not to buy it, according to a report Thursday.

During a July 15 appearance on CNBC, Lutnick downplayed the Trump administration’s decision to lift an additional set of export controls that would have barred sales of the H20 – a less-powerful version of Nvidia’s chips that was made specifically to comply with US export controls on the sensitive technology.

“We don’t sell them our best stuff, not our second-best stuff, not even our third-best,” Lutnick said at the time.

Howard Lutnick’s ‘insulting’ remarks about Nvidia’s H20 chips irk China: report

Chinese officials are peeved over Commerce Secretary Howard Lutnick’s “insulting” remarks about Nvidia’s H20 computer chip — and are now pressuring domestic firms not …

nypost.com

 

[Tall Timbers]

I understand however why this may be necessary, because we need to improve our ability to manufacture computer chips here and get away from China.

Taiwan is the chip giant of the world. Intel used to be king of the chip makers but circumstances have led them to fall well behind cutting edge in the areas where chips are most wanted these days. China makes chips but they have a serious quality control problem. The problem is serious enough that China probably uses chips from Taiwan or the US for military use.

The US bailed out Chevrolet in return for a stake in the business. Chevrolet eventually recovered and paid the USA back in full. Ford was offered a govmint bailout too but turned it down and survived on it's own. The govmint bailed out banks, for nothing in return, I believe, but frankly I believe govmint was the primary source of the reason banks hit such hard times when they did.

Intel isn't currently in danger of going bust and probably has enough resources to survive and eventually thrive. The govmint doesn't usually make a good business partner, unless it stays completely out of it...

 

[Margery]

Fox news guest Kevin O'Leary explains why this Intel chip thing is bad business. - YouTube

It's the first 2 minutes only but he explains it using good economic reasoning as to why govt should stay far far away out of business and let the American business model do it's thing.

Namely the fittest and best survive, the companies that are busy shooting themselves in the foot need to die and die fast, and the resources and people that ARE valuable can then be bought up by better business.

Govts tend to make stupid business decisions, and they often step in to prop things up that should fail.

 

[Margery]

That 10% share in Intel, makes the govt the biggest shareholder in Intel. I had no idea- I thought a 10% share was large but surely not the largest. NOPE! Maybe the govt will stay out of telling Intel what to do, but if they make bad decisions, what comes next? Found that out yesterday. And I took a look at Intel to see if Kevin O'Leary was right on Fox yesterday.

He was. Intel has had poor performance - dropping share prices over the past 5 years.

And that puts the govt as the major shareholder in a market where Nvidia and AMD are competing with Intel.

Does the govt allow competition against it's investment in Intel, or are they going to be hands off.

Time will tell but when this has been done in the past (Canada is very fond of this sort of thing) it isn't usually a good thing for private enterprise. Govt has a heavy thumb on the scales.

On the other hand, chips are part of a national defence strategy, and making sure that is secure "Trumps" all other considerations.

 

[Tall Timbers]

The Babylonbee has an apt story about this. The title says it all:

Trump Vows To Nationalize As Many Private Companies As It Takes To Defeat Socialism
WASHINGTON, DC — President Donald Trump announced this week his administration plans on nationalizing as many private businesses and companies as possible in order to fight socialism.

Following the announcement that his administration is buying a large share in floundering tech company Intel, Trump defended the move by arguing the only way to fight socialism is for the government to buy up large portions of private businesses and nationalize them.

"We must seize the means of production, comrades!" Trump announced in a press conference earlier this week. "Only then will the worker truly be free. We must control the private companies in order to stop the spread of socialism. It makes perfect sense."

Trump Vows To Nationalize As Many Private Companies As It Takes To Defeat Socialism

WASHINGTON, DC — President Donald Trump announced this week his administration plans on nationalizing as many private businesses and companies as possible in order to fight socialism.

babylonbee.com

 

[Tall Timbers]

If you read the Babylonbee article it really hits the nail on the head. The US Govmint just isn't the type of govmint that should have an interest in nationalizing corporations. That's what dictators do, of course, usually without compensation.

I don't think this will bode well for Intel or for the tech industry long term. A future Administration could demand a Board seat and then cause all kinds of trouble for Intel.

I just learned that the govmint is getting the shares at a discount to the current value. Somwhere between a 15% and 20% discount.

 

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If you read the Babylonbee article it really hits the nail on the head. The US Govmint just isn't the type of govmint that should have an interest in nationalizing corporations. That's what dictators do, of course, usually without compensation.

I don't think this will bode well for Intel or for the tech industry long term. A future Administration could demand a Board seat and then cause all kinds of trouble for Intel.

I just learned that the govmint is getting the shares at a discount to the current value. Somwhere between a 15% and 20% discount.

Insider trader in plain site? lol. Things like this that don't help Trump's image. Like the 600k China student comment, its almost like Trump is an expert in how to jade America first.

 

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US says no new visas: Trump not opening doors to 600,000 Chinese students; White House clarifies policy - The Times of India

US News: The White House clarified that President Trump is not increasing student visas for Chinese nationals, despite recent speculation. The 600,000 figure c

timesofindia.indiatimes.com

Case in point I guess? Trump is a master at getting his takes out there. Looks like he likes to bait MAGA too...lol. Apparently this is a two year-number. Perhaps a leverage card in China negotiations in stating in publicly