CHIPS Ahoy! Issue 3

The Trump Administration continues to navigate the CHIPS Act in ways that would have even the riskiest gambler saying, “too rich for my blood.” Most recently, the president rolled the dice on Intel by converting a CHIPS grant into a 10% equity stake in the corporation. In exchange, Intel received $5.7 billion in CHIPS Act grants that had already been promised but were being withheld.

The idea of exchanging CHIPS funding for stock equity was first pitched in 2022 by progressive Senators Bernie Sanders and Elizabeth Warren, who co-authored an amendment to the CHIPS Act that would have required semiconductor companies to provide equity, warrants, or senior debt in order to qualify for grants. The amendment was rejected. 

Senators Sanders and Warren were divided on the Trump administration’s deal. Sen. Sanders coming out in support of a Trump policy was not on anyone’s 2025 bingo card, but Sen. Warren criticized the plan for rolling back benchmarks set by the Department of Commerce to hold Intel accountable, and for waiving guarantees Intel had already made, including to remain neutral on unionization efforts, invest in apprenticeships, refrain from stock buybacks for five years and create affordable child care options.

Moreover, the government does not have a board seat or voting shares as part of the deal, and the fabs that may result from this new investment of American tax dollars don’t even have to be built in America. Accountability measures like these and others are necessary to ensure that taxpayers benefit from the deal. Rolling them back is a major concern.

The administration did include some constraints: According to Intel’s CFO, David Zinsner, the U.S. government would have the option to purchase an additional 5% of Intel at just $20 a share, if in the next five years the company sells or otherwise offloads a majority stake in the “foundry” portion of its business.

Given Intel’s unsteady footing, that possibility was a concern until recently, when the AI corporation Nvidia announced it would purchase about $5 billion in Intel stock, shoring up Intel for the near future at least. The Nvidia deal clearly benefits Intel’s shareholders — Intel’s stock price soared by 25% the day after the deal was announced — but it’s too soon to tell whether those benefits will trickle down to Ohio workers.

Intel has already started backtracking on promises to Ohioans. Those promises are a big part of what made the Ohio One project appear as if it could potentially be a good investment of Ohioans’ tax dollars. The more the state allows Intel to roll back its commitments, the less of a return we’ll see for regular Ohioans. The Trump administration’s deal allows the corporation to shirk its responsibilities to taxpayers nationwide.

Still, the deal “cracks open a door others should be ready to walk through,” says Indigo Oliver in a recent article for The New Republic. She argues that “the government should hold equity in more of corporate America, not less,” and that the deal with Intel should serve as precedent for progressives to demand Americans get a greater share of the profits our tax dollars make possible. 

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