Seen from the Oval Office, it’s not hard to make the case that the US government taking a huge stake in chipmaker Intel makes sense. Viewed from elsewhere, the plan is somewhere between pointless and dangerous.
It’s not that government and business shouldn’t mix, per se. The US chip sector is already an artefact of state support. Since the days of Fairchild Semiconductor, innovators have enjoyed contracts, grants, cheap loans and tax breaks galore. Electrical and electronic companies have received over $32bn since 1989, according to the Good Jobs First Subsidy Tracker, not including loans and roughly $50bn pledged under the CHIPS Act of 2022.
For a transactionally minded president, the calculus is pretty clear: given all that largesse, why not demand something back? Previous administrations presumably realised that rewards come in other forms, such as national prosperity and global greatness. But converting grants and other goodies earmarked for Intel into equity creates a more tangible return on that investment.