US seeks Intel stake without governance rights: Lutnick

[WASHINGTON] Commerce Secretary Howard Lutnick confirmed discussions between the US and Intel for the government to take a stake in the chipmaker, casting the plan as a bid to convert Chips and Science Act grants into equity.

Lutnick on Tuesday (Aug 19) said the plan would not give the US governance or voting rights in the company, even though it could make the federal government Intel’s largest shareholder. He assailed the chips law signed by former President Joe Biden for giving semiconductor manufacturers subsidies without any return for US taxpayers.

“It’s not governance, we’re just converting what was a grant under Biden into equity,” Lutnick said in a CNBC interview. “Non-voting.”

Bloomberg News previously reported that the Trump administration has discussed taking about 10 per cent of the beleaguered chipmaker, as SoftBank Group announced a surprise bet on Intel’s revival by agreeing to acquire a US$2 billion stake in the company.

Intel rose as much as 11 per cent in New York trading on Tuesday, while SoftBank fell 4 per cent in Tokyo.

“Why are we giving a company worth US$100 billion this kind of money? What is in it for the American taxpayer? And the answer Donald Trump has is we should get an equity stake for our money,” Lutnick said. “So we’ll deliver the money which was already committed under the Biden administration, we’ll get equity in return for it.”

The discussions underway with Intel would mark a sea change in US policy towards semiconductors. The arrangement, if finalised, could potentially lay the groundwork for similar agreements with other chipmakers.

“Imagine this: the Biden administration was literally giving Intel – for free, and giving TSMC money for free and all these companies just giving them money for free,” Lutnick said, referring to Taiwan Semiconductor Manufacturing, another major chipmaker.

“Donald Trump turns that into saying, ‘Hey, we want equity for the money,’” the secretary continued. “How could that not be smarter, better and more important for the American taxpayer than just free money?”

Lutnick said the US wants to reshore some chipmaking for national security purposes.

“We need to make our own chips here. We cannot rely on Taiwan,” he said.

At the same time, Lutnick did not rule out allowing Nvidia to sell a new artificial intelligence chip it is developing for the Chinese market. Reuters reported the semiconductor would be based on its Blackwell architecture and more powerful than the H20 model it’s currently allowed to export there.

“Of course, he would like to sell a new chip to China,” Lutnick said, referring to Nvidia chief executive officer Jensen Huang. “I’ve listened to him pitch the president, and the president listens to our great technology companies, and he’ll decide how he wants to play.”

Trump last week signalled he was open to allowing Nvidia to sell a scaled-back version of its Blackwell model to China. The administration hammered out an unusual deal with Nvidia and Advanced Micro Devices to pay the government 15 per cent of revenue tied to Chinese chip sales. BLOOMBERG