Fifteen days after President Trump accused Intel CEO Lip-Bu Tan of being "highly CONFLICTED and must resign," the U.S. government bought a 9.9% stake in Intel for $8.9 billion. National Economic Council Director Kevin Hassett said similar transactions could occur across industries and described the purchase as a "down payment on a sovereign wealth fund." Experts called the move unusual and potentially unprecedented for a strategic domestic firm. Douglas Rediker emphasized the atypical nature of significant U.S. government ownership in a major company. Luigi Zingales criticized using government stock ownership to address alleged CEO self-dealing. The deal's objective and next steps remain unclear.
Only 15 days after President Trump posted that Intel CEO Lip-Bu Tan "is highly CONFLICTED and must resign," the two men had seemingly become best buds, and the U.S. sent Intel $8.9 billion in return for a 9.9% stake in the company. Then, yesterday, National Economic Council Director Kevin Hassett told CNBC, "I'm sure that at some point there'll be more transactions, if not in this industry, in other industries." He likened the deal to a "down payment on a sovereign wealth fund."
"It is entirely unusual, if not unprecedented, for the United States government to take a significant ownership stake in a major company in the United States, particularly one in a strategic industry," says Douglas Rediker, a lawyer and economist with long experience in global finance, sovereign wealth funds, global capital flows, and their impact on foreign policy. Luigi Zingales, a professor at the University of Chicago business school, says, "The thing that, to me, is shocking and unbelievable is that it starts as an attack to the CEO based completely on his potential self-dealing-which might be true, might not be true-but if that's the problem, it cannot be solved by giving some stock to the U.S. government."
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