Sen. Bernie Sanders (I-Vt) has expressed his support for President Donald Trump‘s plan to convert U.S. grants to chipmakers into government equity in these firms.
Trump, Sanders Push For Taxpayer Returns On Chip Grants
Senator Sanders has backed President Trump’s proposal to change U.S. grants to chipmakers into government stakes. This includes a substantial $10.9 billion stake in Intel (NASDAQ:INTC), reported Reuters. Sanders said, “If microchip companies profit from the generous grants they receive from the federal government, American taxpayers have a right to a reasonable return on that investment.”
Check out the current price of INTC stock here.
This unlikely alignment between Sanders and President Trump on government ownership in private companies signals a notable turn by Trump toward state intervention, a stance usually linked with the political left.
Sanders alongside Senator Elizabeth Warren (D-Mass.) proposed a Chips Act amendment requiring recipient companies to grant Treasury a warrant, equity stake, or senior debt before receiving Commerce Department awards.
Sanders expressed his satisfaction, saying, “I am pleased the Trump administration agrees with the amendment I proposed three years ago.” He added that taxpayers should not be providing billions of dollars in corporate welfare to large, profitable corporations like Intel without getting anything in return.
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Intel Stock Suffers Amid Funding, Equity Speculation
The announcement comes at a time when Intel’s stock has been experiencing significant fluctuations. The company’s shares plunged by nearly 7% during after-hours trading on Wednesday after reports emerged of the chipmaker seeking additional investors following a $2 billion capital injection from SoftBank Group (OTC:SFTBY). This was coupled with speculation about potential U.S. government equity involvement.
However, Commerce Secretary Howard Lutnick clarified that any possible arrangement would not grant the government voting power or governance rights in Intel. “..we're just converting what was a grant under Biden into equity for the Trump administration, for the American people," stated Lutnick.
Cuban Backs Trump's Unique Deal; O'Leary Objects To Government Involvement In Tech Sector
Before Intel, the Trump Administration made news for its unique deal with Nvidia Corporation (NASDAQ:NVDA) and Advanced Micro Devices, Inc. (NASDAQ:AMD). Earlier in August, billionaire entrepreneur Mark Cuban praised Trump’s controversial deal, which involved a 15% revenue-sharing agreement with Nvidia and AMD, calling it a progressive form of taxation.
However, entrepreneur and “Shark Tank” investor Kevin O’Leary expressed his disapproval of the potential government stake in Intel, stating that entrepreneurs are what have made the technology sector great and the U.S. government should stay out.
Benzinga’s Edge Rankings place Intel in the 54th percentile for momentum and the 74th percentile for value, reflecting its average performance. Check the detailed report here.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
