The central government may acquire stakes in more American chip firms or even diversify into other industries, White House economic adviser Kevin Hassett told CNBC on Monday, following its recent equity deal with Intel.
Hassett, asked if the Intel deal was the start of a larger effort by the US government to take equity stakes in other industries that it subsidizes, or other companies in the AI and chip space that are subsidized such as Advanced Micro Devices Inc, or Taiwan Semiconductor Manufacturing Co, said there could be other similar transactions.
US Govt Stake Deals Widen
“I think this is a very, very special circumstance because of the massive amount of CHIPS Act spending that was coming Intel’s way,” the National Economic Council director told CNBC.
“But the president has made it clear all the way back to the campaign that he thinks that, in the end, it would be great if the US could start to build up a sovereign wealth fund. And so, I’m sure that at some point there’ll be more transactions, if not in this industry in other industries,” Hassett said.
Corporate Risk Concerns Grow
The Intel investment marks the latest unusual deal with US companies that has worried critics, who say President Donald Trump’s actions create new categories of corporate risk.
Under Trump, the US government has allowed AI chip giant Nvidia to sell its H20 chips to China, allowed the Pentagon to become the largest shareholder in mining company MP Materials, and acquired a “golden share” with certain veto rights as part of Japan’s Nippon Steel purchase of US Steel.
Intel Flags Risks
Intel on Monday said the US government’s 10% stake in the company could bring business risks, including possible impact on international sales and challenges in securing future government grants.
The company laid out the new “risk factors” in a securities filing after the government decided to convert government grants into an equity stake in Intel.
It is uncertain if this deal may result in other government entities trying to convert their existing grants into equity investments or if they might be unwilling to support future grants, the company said.
(With Inputs from Reuters)
