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Liberal US Senator Bernie Sanders on Wednesday threw his support behind President Donald Trump's plan to convert US grants to chipmakers, including $10.9 billion for Intel, into government stakes in the companies.
"If microchip companies make a profit from the generous grants they receive from the federal government, the taxpayers of America have a right to a reasonable return on that investment," Sanders, an Independent who caucuses with Democrats, said in a statement to Reuters.
The awards were part of the 2022 Chips and Science Act, which sought to lure chip production away from Asia and boost American domestic semiconductor output with $39 billion in subsidies.
But Commerce Secretary Howard Lutnick is now looking into the government taking equity stakes in embattled Intel and other chipmakers in exchange for the grants, sources told Reuters on Tuesday, as the Trump administration seeks "equity" in return for "investments."
The unusual alignment between Sanders and President Trump on government ownership stakes in private companies highlights a marked shift by Trump toward policies of state intervention in the economy that are typically associated with the left.
Since Trump took office for a second time in January, he agreed to allow AI chip giants Nvidia and AMD to sell AI chips to China in exchange for the US government receiving 15 per cent of revenues from the sales. The Pentagon is set to become the largest shareholder in a small mining company to boost output of rare earth magnets. And the US government negotiated for itself a "golden share" with certain veto rights as part of a deal to allow Nippon Steel to buy US Steel.
Sanders and Democratic Senator Elizabeth Warren had proposed an amendment to the Chips Act that would have forbidden the Commerce Department from granting a Chips Act award without the Treasury Department receiving a warrant, equity stake or senior debt instrument issued by the recipient company.
"I am glad the Trump administration is in agreement with the amendment I offered three years ago," Sanders said. "Taxpayers should not be providing billions of dollars in corporate welfare to large, profitable corporations like Intel without getting anything in return."
Much of the funding for Chips Act award recipients such as Micron, Taiwan Semiconductor Manufacturing Co and Samsung has not been disbursed.