For every government industrial policy is a complex situation because every government wants its people to be productive, its people reasonably well paid and its people to have good lives. In the world of industrial policy, there are building blocks and at the basic level every government wants those building blocks in its country. The issue is somebody needs to buy the output of the industrial companies. When government gets involved in any industry, invariably it will have different goals than outside investors. Does the company layoff people? how well are people paid? what is the reason for owning the shares? and the list goes on and on. For investors are more interested in their return.

In an article written by Michael Liedtke and Elaine Kurtenbach of the Associated Press, President Trump is changing US industrial policy. The government will take a 10% equity stake in Intel, the shares would be non-voting. The government has taken equity stakes in the past, usually preferred shares and some of the companies recovered after a few years the government made profits when they sold.

Intel the company was once a industry leader and many laptops have a little sign Itel inside, but the personal computer boom changed to mobile and now has changed to AI and Intel missed the mobile and has been slow to the party for AI. The computer chips that Intel is very useful for lower value which many companies used in electronics. The chips are not AI chips.

Softbank Group Corp has made a $2 billion investment in Intel for 2%. Intel’s market value is about $110 billion.

Intel has received money from the CHIPS fund of $2.2 billion of the $7.8 billion that it is pledged. Part of the funds was to built a chips factory in Ohio which has been in the works since 2022.

Linking to dividend paying stocks, while governments and corporations work together and sometimes it is seamless, it is rare for the government to directly take ownership positions in companies. The reason is while they have the same end, how they get there will be the issues. Government has many indirect ways to help corporations including research at universities, offering tax credits or incentives, but generally it is better that they do not take a equity position.

There are more questions than answers, till the next time – to raising questions.