Scaling Laws Uncle Sam Buys In: Examining the Intel Deal
Aug 28, 2025
Peter E. Harrell, an Adjunct Senior Fellow at the Center for a New American Security, joins Kevin Frazier to discuss the White House taking a 10% stake in Intel. They analyze the policy rationale and legality behind this move and consider its implications for the semiconductor industry. The conversation dives into the CHIPS Act, historical precedents of government interventions, and the complexities of federal authority in corporate equity transactions. They also address concerns over government favoritism and the impact on competition with other tech giants like NVIDIA.
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Government Enters Corporate Ownership
- The U.S. took a 9.9% stake in Intel, marking a major government intervention in private industry.
- This shift could signal state-capitalist tools becoming routine for strategic sectors.
Deal Follows Intel's Decline
- Intel received about $11 billion under CHIPS but later deteriorated operationally and delayed fabs.
- The administration announced a 9.9% stake after a meeting between the president and Intel's CEO.
This Is Not A Typical Bailout
- Historically U.S. equity stakes emerged during bailouts and were sold after stability returned.
- The Intel filing suggests the government could hold its stake indefinitely, altering that pattern.