US Commerce Department may take equity stakes other chipmakers after Intel

The U.S. Commerce Department is weighing whether to take an equity stake in Intel and other chip companies in exchange for the CHIPS Act grants, according to two people with knowledge of the matter. 

Commerce Secretary Howard Lutnick raised the idea under a broader push to rebuild manufacturing in the US, a central goal of President Donald Trump’s agenda.

On Tuesday, Lutnick said the government is looking for an equity position in Intel under the program created during former President Joe Biden’s administration. He now aims to extend that approach to other firms, a White House representative and another source said.

The move comes after a number of unusual arrangements between Washington and U.S. firms

As reported earlier by Cryptopolitan, the administration allowed Nvidia to sell the H20 AI chips to firms in China while the United States takes 15% of the sales. The Pentagon is also set to turn into the biggest shareholder in a mining company in order to increase the production of rare-earths. 

Critics say such steps increase corporate risk tied to political decisions and could expose taxpayers if investments sour. Much of the $52.7 billion in CHIPS Act funding has yet to be disbursed to companies, including Micron, Taiwan Semiconductor Manufacturing Co., Samsung, and Intel.

Two sources of Reuters have mentioned Scott Bessent is also involved in the US CHIPS Act talks, though Lutnick is leading the effort. The Commerce Department mainly looks after the CHIPS funding. The sources said Lutnick has pressed the equity concept and that Trump supports it.

Karoline Leavitt, the White House Press Secretary said earlier that Howard Lutnick is working on an Intel deal that would give the government a 10% stake. “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,” – Karoline Leavitt.

In a CNBC interview, Lutnick said Washington wants a return on its “investment.” “We’ll get equity in return for that … instead of just giving grants away,” he said. Trump has also stated earlier that he wanted to end the CHIPS act. 

Lutnick’s remarks came a day after SoftBank invested in Intel

Just a day earlier, SoftBank Group decided to put in $2 billion in tech firm Intel, which was also reported by Cryptopolitan. Intel has been struggling and failing to compete with other major tech firms due to management issues. He contrasted the new approach with earlier practices. 

“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 said.

The plan is drawing scrutiny abroad. Adviser to South Korea’s president, Kim Yong-beom, said the affected companies and his government had not been informed of such a proposal. He said foreign chipmakers such as Samsung need “predictability” for U.S. investments.

An official from Korea’s chip-making industry said that semiconductor firms may find it difficult to accept equity stakes from the U.S. government. The official warned some might hold back or postpone projects unless Washington offers more incentives, such as larger funding.

In Taiwan, Economy Minister Kuo Jyh-huei was asked in Taipei whether the U.S. could seek a stake in the chipmaker TSMC. He said the ministry would discuss the possibility with TSMC, which he added is privately held rather than state-owned.

“We will also discuss with the National Development Council, as it is a shareholder of TSMC. We will thoroughly understand the underlying meaning of the U.S. Commerce Secretary’s remarks, but this will require some time for discussion and assessment,” Kuo said.

The smartest crypto minds already read our newsletter. Want in? Join them.