Trump Admin Considering Buying a Stake In Floundering Intel
The Trump administration is reportedly in discussion to buy a stake in the struggling American technology company Intel, further eroding the distinction between the state and industry.
Bloomberg reports that the federal government is discussing a stake in Intel’s long-planned factory hub in Ohio.
These plans have not yet come to fruition as Intel’s business operations have struggled mightily in recent years. Over the past five years, Intel’s share price has slipped by about 50%. The company has dealt with voltage issues with its chips in recent years, and slashed thousands of jobs in a desperate attempt to cut costs.
Last December, Intel’s former CEO, Pat Gelsinger, was ousted due to Intel’s widespread issues. Lip-Bu Tan replaced Gelsinger in March this year. Tan made the news last week after President Trump publicly urged Tan to resign due to alleged ties to China. Tan, born in 1959 in the Federation of Malaya, now Malaysia, moved to the United States from Singapore to attend MIT and later the University of San Francisco.
Somewhat ironically, the American tech industry is starting to bear more than a striking resemblance to China under the Trump administration as it creates stronger links between private enterprise and the federal government. Earlier this week, Trump made waves after cutting an unprecedented revenue-sharing deal with American companies Nvidia and AMD to take 15% of their revenue on chips sold to China. The administration previously barred companies from selling certain chips to China, citing security concerns.
Following Trump’s demands for Tan to be removed from his post at Intel last week, the two met at the White House on Monday. Anonymous sources say that plans concerning the government acquiring a stake in Intel were discussed during this meeting. While the plans remain in flux, and nothing may materialize, it is yet another strange development as the Trump administration gets significantly more involved in private business operations.
The White House and Intel both declined to comment on the specific matter. However, Intel did say that it is “deeply committed to supporting President Trump’s efforts to strength US technology and manufacturing leadership,” and that the company looks forward to “continuing our work with the Trump administration.”
“In the past few months, we’ve seen the government take a much more active role in engaging the economy, a much more sort of hands-on industrial policy,” Geoffrey Gertz, senior fellow at the Center for a New American Security, told Bloomberg Television. “That appears to be the current direction for US industrial policy in these critical sectors.”
Intel’s stock is up nearly 21% so far this week at the time of writing.
Image credits: Header photo licensed via Depositphotos.
