United States Commerce Secretary Howard Lutnick is looking into the government taking equity stakes in Intel and other chipmakers in exchange for grants under the CHIPS Act, which aims to spur factory-building in the U.S., two sources said.
As part of a plan to revive U.S. manufacturing — a key Trump agenda — Lutnick said earlier on Tuesday, Aug. 19, that the U.S. government wants an equity stake in Intel in exchange for cash grants approved by the Biden administration.
Now Lutnick wants to expand that plan to other companies, according to a White House official and a person familiar with the situation.
The Trump administration has recently made a number of deals with U.S. companies, including allowing AI chip giant Nvidia to sell its H20 chips to China in exchange for the U.S. government receiving 15 percent of those sales. The Pentagon is slated to become the largest shareholder in a small mining company to boost output of rare earth magnets.
The government’s intervention in corporate matters has worried critics who say President Donald Trump’s actions create new categories of corporate risk and that a bad bet could mean a hit to taxpayer funds.
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Funds yet to be released
Much of the funding under the CHIPS Act has not yet been dispersed for companies such as Micron, Taiwan Semiconductor Manufacturing Co (TSMC), Samsung and Intel.
TSMC and Intel declined to comment. Micron, Samsung and the White House did not respond to requests for comment on whether Lutnick is considering more stakes.
The two sources told Reuters on Tuesday that Treasury Secretary Scott Bessent is also involved in the CHIPS Act discussions, but that Lutnick is driving the process. The Commerce Department oversees the $52.7 billion CHIPS Act money.
Lutnick has been pushing the equity idea, the sources said, adding that Trump likes the idea.
White House Press Secretary Karoline Leavitt confirmed earlier that Lutnick was working on a deal with Intel to take a 10 percent government 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,” she told reporters.
Speaking on CNBC, Lutnick said the U.S. wants a return on its “investment.”
“We’ll get equity in return for that … instead of just giving grants away,” he said.
Trump has previously said he wanted to kill the CHIPS Act program.
Lutnick’s comments suggested any stake would be non-voting, meaning it would not enable the U.S. government to tell the company how to run its business.
His comments came a day after SoftBank Group agreed to invest $2 billion in Intel, which has struggled to compete after years of management blunders.
“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.
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Companies need ‘predictability’
South Korean presidential advisor Kim Yong-beom said neither the government nor the potentially affected companies have heard about such a plan. He added that foreign companies like Samsung needed “predictability” for their U.S. investments.
Meanwhile, a Korean chip industry official said it would be hard for chipmakers to accept U.S. government equity stakes, and some may either decide not to invest or delay investments unless Washington provides incentives like increasing funding.
Taking lawmaker questions in Taipei on Wednesday and asked whether the U.S. government could take a stake in TSMC, Taiwan Economy Minister Kuo Jyh-huei said his ministry would consult with the company, which he pointed out was private and not a state-owned enterprise.
“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.
Reuters contributed to this report
