When it was announced last month that the US government has taken a 10% stake in Intel, President Trump said he thinks it’s a great deal for America and for the computer chip maker, which is building a huge facility in central Ohio. While free market conservatives and progressive said the deal with the financially troubled company violates basics of capitalism, Ohio’s Republican US senators are praising it.
The deal changes the federal CHIPS Act grants going to Intel into equity, but the government doesn’t have a seat on Intel’s board or other rights.
At an event in Columbus promoting a private company building affordable housing without government funding, U.S. Sen. Bernie Moreno (R-OH) said the Intel deal is similar.
“Well, it’s not different. It was a choice between giving Intel a handout of $9 billion and the taxpayer—you, all of us—get nothing in return, versus taking an equity stake in which at some point, once Intel gets back on its feet, we can sell those shares and taxpayers can get a return," Moreno told reporters. "So it's a contrast between just a handout—by the way, which is more grift that occurs between large companies that can figure out how to tap into taxpayer dollars—versus a much smarter, more common sense approach."
Intel said claw-back and profit-sharing provisions on the $2.2 billion in federal money that the company already received will be eliminated. That money in the bipartisan CHIPS Act was approved by Congress and signed into law by President Biden in 2022. Trump blasted the CHIPS Act in his State of the Union address earlier this year, saying it's a "horrible, horrible thing" and suggesting lawmakers roll it back.
The project has been delayed a few times as Intel has weathered financial troubles that have resulted in lower sales, employee layoffs and drops in stock gains. CEO Pat Gelsinger retired last year, with Lip-Bu Tan installed as CEO in March.
On Aug. 7, Trump suggested Tan had ties to Chinese companies and "is highly CONFLICTED and must resign, immediately. There is no other solution to this problem." Trump met with Tan on Aug. 11, and the 10% deal was announced by Trump, his administration and and Intel on Aug. 22.
U.S. Sen. Jon Husted (R-OH) was heavily involved in Intel’s decision to build its fabricating plants in central Ohio. He said Intel "jumped at this opportunity".
"They've reassured me that the Ohio fabs are still full, full steam ahead. But they do need customers," Husted said. "They've got to compete. That doesn't change. The element of competition does not go away just because, the president took a stake in Intel. They still have to innovate. They still have to prove that they can out- compete."
With this deal, Intel said the US government’s total investment is $11.1 billion.
