Are you suggesting the government buy Intel, or that they steal it from its current owners? You might have different opinions than I do about the morality of such a thing, but either way it would be disastrous as it would disincentivize all investment in things the US can steal.

The US could have required stock in Intel instead of taking nothing: Intel gets money, US gets influence over Intel. Just like it works everywhere else.

There are 3 good ways to give money to the private sector: as a purchase order, in exchange for equity, or as an interest bearing loan.

If the company won't accept money in one of those 3 forms they probably don't need it.

> Just like it works everywhere else.

That's certainly not the case, though.

When giving a company like Intel money, you could give that in exchange for part of the company or for the company to do something for you.

For example, the US could give Intel $8B for about 4% of Intel (at today's market price). However, that wouldn't get them the new US chip fab that they want. It would get them 4% ownership of Intel.

Another example, the US could give Intel money to build them a supercomputer. The US would get a supercomputer, but it wouldn't get any ownership of Intel. When I buy Intel processors, I get a product, but no ownership of the company.

In this case, the US wants to buy a product: a US based fab. You might say "but the fab benefits Intel." You're totally right, but when I buy Intel processors it gives Intel capital they'll use for their benefit as well.

The real question is whether the US is overpaying for this fab or if the fab is even worth it. Could the US have gotten the product it wants cheaper? Is having new US based fabs worth paying for?

I think the answer to the latter is a resounding "yes" for strategic reasons. Tens of billions is a tiny drop in the bucket to help ensure something bad doesn't happen to one of the most important industries to US prosperity. We spend $850B/year on the military to try to ensure continued US security and prosperity. Giving Intel $8B is probably a bargain by comparison. Likewise, if you hate that Intel is being given $8B, you'll really hate how much Boeing, Lockheed, Raytheon, Northrop, and General Dynamics get from the government.

Sure, the US could have required Intel stock as part of the deal, but depending on the amount of stock, Intel would have likely rejected it. Should the US have offered $11-12B for 2% of Intel plus a US fab? If that's the case, why doesn't the US government simply buy stock in Intel today?

If your argument is that the US should end up with 20% of Intel for that cash, Intel would reject it. That's giving Intel a tiny fraction of what their stock is worth - 20% of Intel is worth $38B. If the government wanted to nationalize Intel, it'd probably cost them $210-250B. The government isn't just allowed to take something without just compensation. While Intel's market price is $188B, usually buying a whole company involves having to pay a premium over that.

The US has taken ownership stakes in companies in some scenarios. For example, the bank "bailouts" gave the US preferred stock with a dividend rate of 5% that would climb to 9% from 2008-2013. The government also got warrants to purchase common stock at a very low price. Recipients generally repaid what they were given and the government made billions off the stock warrants. In the case of the bank "bailouts", the government was giving the banks money to help save the banks and demanded ownership in return.

By contrast, Intel doesn't need help. The US government wants to get Intel to do something; the government wants to pay Intel to make them a product. Maybe the government could have gotten a better deal than $8B. However, given that few companies could legitimately create modern fabs and given that even companies like TSMC have been having difficulty at creating fabs in the US, $8B doesn't seem like a crazy amount of money to be offering as a carrot. It looks like the US is also spending $6B on Samsung and $5B on TSMC to get them to build fabs here.

If the US wanted ownership and a new fab, it would cost more than $8B. If the US wanted a new fab plus 10% of Intel, it'd likely cost them $25-30B.

An equity stake doesn't necessarily mean stock. The US could have given Intel $8B for a 25% stake in the new fab.

Or they could give Intel only 75% of that for the actual benefits they want.

“More Intel stock” is not in the list of things the government prioritizes. For good reason.

Plus, Intel doesn’t want to be saddled with bureaucratic partners.

Why make a deal more expensive and unattractive to both parties? Better to keep the deal focused on what is actually trying to be achieved.

Buying $8B in equity of a $160B company might get you a board seat (one of 8) but it’s not going to give you control over the company.

Exactly

And a seat on the board retains its fiduciary duty to the company.

It doesn’t allow the government to usurp the company and its resources for its own ends at the expense of other shareholders

The money isn’t in return for some stake in intel though. The money is in return for doing something sub-optimal to the interests of the shareholder. It’s compensation in return for a taking.

If you take without giving something back, that’s an actual taking and that’s illegal outside specific circumstances.

This thread really brought an alarming number of tankies out of the HN woodwork. Not something you typically see on here!

Wow, people are now throwing around the term "tankie" when simply discussing nationalization? That's crazy. That term is becoming as useless as calling someone a fascist or woke.

Dang and I just learned the word too.

There's always been people with really Out There political opinions On Here, but usually they're on the more libertarian side. It seems that mentioning China makes people want to beat them by being more Maoist.

I don't know whether this is an effect of outflux from Twitter or some other social media phenomenon.

If they were to buy Intel for a fair price, why should that disincentivize investment?

Eminent domain is not theft. It is a legally defined practice in most legal systems.

Well, it's still theft of the "depriving the owners of their belongings" variety.

It's just that the groups that can do eminent domain tend to both have guns and be in charge of the local legal system.

Which means they get to define the rules and make up their own name for when its them doing the thieving. ;)

But you understand that as it is an aspect of the legal system, and one that is usually defined higher in the legal hierarchy that it can't be a thing that is defined later, right?

You shouldn't misuse words like you're intentionally doing. Why not go all the way and call it rape or something.

I'm sure the US taxpayer would be very happy to take one hundred and eighty five billion dollars and give it to the investors instead.

Imagine Intel running at the full speed and efficiency of the US government.

But now there is chance that Intel will at some point overtake TSMC again and most(?)/much of their production capacity would be in the US? That chance would no longer exist if the government nationalized Intel.. so what would be the point?