• Kevin Hassett, a top economic adviser, labeled government ownership of Intel (INTC) as "extreme," pushing back against reports of a potential equity stake.
  • The Trump administration is weighing options to boost domestic chip production under the CHIPS Act, but direct ownership faces fierce opposition.
  • Intel's ongoing expansion and reliance on federal funding have sparked debate over the proper role of government in private industry.

Background

The U.S. government has been exploring ways to bolster domestic semiconductor manufacturing, with Intel as a key beneficiary of CHIPS Act funding. Reports emerged earlier this year suggesting the government might take a minority equity stake in Intel—potentially around 9.9%—as part of a broader industrial policy push. However, Kevin Hassett, director of the National Economic Council, dismissed the idea in a recent interview, calling it "extreme" and warning that such a move would set a dangerous precedent.

Hassett's Remarks

Speaking at a Bloomberg event on Thursday, Hassett emphasized that the administration is focused on grants and loans, not ownership. "We have no intention of owning a chip company," he said. "Government ownership would be extreme and would undermine the very market principles that made American innovation possible." His comments come amid growing unease among investors and lawmakers about the government's increasing involvement in the private sector.

Industry Reaction

Intel executives have remained tight-lipped about the equity stake discussions, but people familiar with the matter say the company prefers traditional funding mechanisms. Analysts have noted that government ownership could complicate Intel's relationships with other customers and global partners. Shares of Intel closed down 1.2% on Thursday as the uncertainty persisted.

Implications

Without a deal, the administration would likely rely on existing CHIPS Act grants to support Intel's foundry expansion. However, some policymakers argue that an equity stake would ensure taxpayer dollars are used effectively. The debate highlights the tension between national security objectives and free-market principles. As one person close to the matter put it, "This is uncharted territory."

Correction

An earlier version of this article misstated the size of the potential equity stake. The figure was reported as around 10%, not 9.9%.