White House press secretary Karoline Leavitt said commerce secretary Howard Lutnick was hammering out the details of a nationalisation deal that would see the US government swap Chips Act grants for a stake in the company.
Leavitt said: “As for this 10 per cent government stake deal, the Department of Commerce continues to work on it. I know secretary Lutnick is working on it and ironing out the details, but the president wants to put America’s needs first, both from a national security and economic perspective.”
The idea, apparently cooked up by Lutnick, is being sold as a never-before-seen bit of creative accounting that would allegedly benefit US taxpayers.
“It would ensure that we are reshoring these critical supply chains while gaining something out of it for the American taxpayer,” Leavitt said.
Chipzilla, which has been floundering in its attempt to keep up with Taiwan’s TSMC, could see as much as $10.9 billion in subsidies converted into equity if this all goes ahead. So far, the company has only banked around $2.2 billion, doled out in instalments as it hits specific milestones in manufacturing efforts across Arizona, Ohio, New Mexico and Oregon.
Lutnick, speaking to CNBC, made it clear this was about clawing something back for for the government.
“We should get the benefit of the bargain… that is exactly Donald Trump’s perspective, which is: ‘why are we giving a company worth $100bn this kind of money? What is in it for the American taxpayer?’”
The stake wouldn’t come with any voting rights, so the government wouldn’t have a say in what Chipzilla does next.
Still, the cocaine nose jobs of Wall Street liked what they heard. Shares in Chipzilla spiked more than seven per cent after news of the deal broke. Some of that enthusiasm might have come from reports that Japan’s SoftBank was lobbing $2 billion into the company, with SoftBank chief executive Masayoshi Son even mulling a full buyout of the chipmaker’s manufacturing wing.
Despite the fanfare, Chipzilla has so far kept schtum on the deal. Perhaps it doesn’t want to jinx the prospect of Trump being its new sugar daddy.
