Hassett, in an interview with CNBC, shared that the 10% equity share in Intel does not translate into any controlling rights over the chipmaker. Under the Chips Act, the US government provided money to Intel while in return the government received equity in the company, he emphasised.
The Chips and Science Act was started under President Joe Biden’s administration as a way to foster more domestic manufacturing of computer chips to lessen the dependence on overseas factories.“Equity is not voting (rights), so there is not going to be any government intrusion into the business of Intel,” Hassett said. He likened the transaction to “a down payment on a sovereign wealth fund,” which other countries have as well, according to the economic advisor.
In February, Trump signed an executive action directing officials to create a sovereign wealth fund for the US, following through on an idea he floated during the presidential campaign. Generally, sovereign wealth funds are associated with countries that either have large foreign exchange reserves, such as China, or revenue from the sale of oil or other commodities, like Norway and Saudi Arabia.
In addition, “At some point there’ll be more transactions, if not in this industry then other industries,” Hassett said.
Explaining the scenario, Hassett pointed out that in the past the government funding to businesses didn’t result in any returns on the taxpayer money, but now the government will take equity. Allaying fears around government meddling in business operations, Hassett said, “These are going to be shares that don’t have voting rights, so the government is going to stay out of it.”
The US government acquired 433.3 million shares of Intel’s non-voting stock in return for $11.1 billion provided to the company through previously issued funds and pledges.
