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Analysis by Rex M. Lee, Security Advisor, My Smart Privacy
The unprecedented Trump–Intel deal has sparked debate about U.S. tech leadership, national security, and taxpayer accountability. By converting CHIPS Act funds into a 10% equity stake in Intel, Washington is reshaping industrial policy—but at what cost?
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The U.S. government transformed $8.9 billion in unpaid CHIPS Act and “Secure Enclave” grants into a 10% equity stake in Intel, a cornerstone of America’s semiconductor industry. Unlike traditional subsidies, this deal gives Washington a passive ownership role without board seats or special information rights.
Key Terms for Taxpayers:
This move marks a shift from traditional grants to equity-based investments, a departure from U.S. industrial policy norms. Supporters argue it ensures accountability for public funds. Critics, however, warn of state-directed capitalism that could disrupt global markets and invite foreign regulatory scrutiny.
In March 2025, Lip-Bu Tan became Intel’s CEO. President Trump called for Tan’s resignation after reports highlighted Tan’s past venture investments in Chinese firms linked to the People’s Liberation Army (PLA). Despite tensions, the equity deal proceeded after private discussions. Importantly, the 10% stake is held by the U.S. government, not Tan personally.
The deal includes strict oversight to protect U.S. interests:
These measures aim to prevent taxpayer dollars from supporting China’s civil-military fusion programs, ensuring Intel’s role in secure U.S. defense supply chains, including programs like RAMP-C, SHIP, and the Secure Enclave initiative.
Intel has cautioned that a significant U.S. government stake could complicate foreign sales and trigger regulatory pushback. The discounted share issuance also dilutes existing investors. Critics further worry about political influence in corporate decisions, raising questions about the deal’s long-term impact.
On January 17, 2025, the Supreme Court upheld the Protecting Americans from Foreign Adversary-Controlled Applications Act, forcing ByteDance to divest TikTok or face a U.S. ban. This contrasts with the Intel deal and other policies, like the NVIDIA/AMD AI chip export deal, where Washington earns 15% of profits from sales to China. These contradictions highlight tensions in balancing national security and global commerce.
At its core, the deal uses public funds to support a private corporation without direct benefits for taxpayers. While gains flow to the Treasury, there’s no clear mechanism to offset individual tax burdens. Without robust oversight, the deal risks resembling post-2008 corporate bailouts, prioritizing corporate interests over public returns.
The Trump–Intel deal strengthens a critical U.S. chipmaker but raises concerns about politicized industrial policy, lobbying influence, and taxpayer exposure. Stronger oversight and profit-sharing mechanisms are needed to ensure public funds deliver public benefits.
Rex M. Lee holds Wireless Industry and Application Development Experience (35 years)/Freelance Technology Journalist/Privacy and Data Security Consultant/Blackops Partners Analyst and Researcher/Public Speaker- For More Information Visit My Smart Privacy at: www.MySmartPrivacy.com
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