NEC Director Kevin Hassett on Intel deal: It's possible government will take stake in more companies

Government Intervention & Investment - The US government, through the CHIPS Act, is providing significant funding to Intel, leading to a unique arrangement where the government receives a 10% equity stake in the company [3] - This equity stake is non-voting, implying no direct government interference in Intel's business operations, but rather a form of investment similar to a sovereign wealth fund [4] - The Trump administration views this Intel deal as a potential model for future transactions, suggesting the possibility of the US government taking equity stakes in other industries, especially in AI and chip manufacturing [5][6] - The government aims to maximize the value of taxpayer dollars by securing equity in companies receiving federal funds, ensuring taxpayers benefit from the investment [8][13] Strategic & Economic Implications - The administration believes onshoring production through policies like tariffs will increase the profitability of companies like Intel [17][18] - Intel needs to improve chip demand, either by making better chips or finding new customers, but the administration does not plan to directly influence companies to buy Intel chips [13][14][15] - The current administration suggests that previous administrations should have considered taking equity when the CHIPS Act was initially implemented to incentivize chip companies to build fabs in the US [16] Historical Context & Policy Shift - The move towards government equity stakes represents a potential shift from traditional free market principles, where the government avoids direct involvement in companies [9] - The US government already has equity in entities like Fannie Mae and Freddie Mac, making this Intel deal not entirely unprecedented [12] - The administration denies that it is picking winners and losers, but rather creating a situation that benefits both the company and the taxpayers [11][10]