CHIPS Act in Contrast: Biden’s Grants vs. Trump’s Intel Investment

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   Sharlee01posted 3 days ago

   
   
   Biden Administration: Grants and Loans under the CHIPS Act
   
   Under the Biden administration, the CHIPS and Science Act allocated nearly $53 billion to bolster U.S. semiconductor manufacturing, research, and workforce development. Of this, over $36 billion was designated for direct incentives, including grants and loans to companies
   
   During President Biden’s term, the CHIPS and Science Act directed significant federal funding to support domestic semiconductor manufacturing. Intel was a major recipient, receiving up to $8.5 billion in direct grants for projects in Arizona, New Mexico, Ohio, and Oregon. The company also received $3 billion for the Secure Enclave program, designed to strengthen trusted manufacturing for government use.
   
   These grants were non-repayable but required Intel to meet specific milestones to maintain eligibility. The goal was to encourage private investment, create jobs, and advance technology in the semiconductor industry. While these programs have spurred investment and employment, the direct financial return to the federal government has been minimal, since the grants do not provide ownership or revenue from company profits.
   
   Although the grants support important projects and jobs, some initiatives may face delays or challenges, meaning the government’s investment does not always translate into the intended economic outcomes.
   
   Trump Administration: Equity Investment in Intel
   
   What makes the Trump administration’s Intel deal particularly notable is that it is unprecedented in modern U.S. history. Traditionally, federal support for private companies, under presidents from both parties, has come in the form of grants, loans, tax incentives, or loan guarantees. While these mechanisms aim to stimulate growth or achieve policy goals, they do not involve taking an ownership stake in the company. By converting a portion of CHIPS Act funding into a 9.9% equity stake, the U.S. government became a shareholder in Intel, creating the potential for direct financial returns through dividends and capital gains. While there have been rare instances of government ownership, such as during wartime production or the 2008 financial crisis bailouts of GM and AIG, these were emergency measures, not strategic, long-term investments in a leading U.S. corporation. This makes the Trump Intel investment a historically unusual approach to federal support.
   
   In 2025, the Trump administration took a unique approach by converting part of previously awarded CHIPS Act funding into a 9.9% equity stake in Intel. This made the U.S. government a shareholder in one of the country’s leading semiconductor companies. The investment allows the government to potentially earn dividends and capital gains if Intel performs well, creating a direct financial return for the Treasury.
   
   While the government does not control Intel’s day-to-day operations, this approach represents a strategic way to support the company while giving taxpayers the opportunity to benefit from its success. Unlike traditional grants, this investment aligns federal support with the company’s performance, offering a potentially sustainable and profitable outcome for the U.S. government.
   
   Funding Source: The U.S. government’s 9.9% equity stake came from converting $8.9 billion in previously allocated CHIPS Act grants into Intel stock. This means the money was already earmarked for semiconductor support, so the government didn’t spend new money out of the Treasury beyond what Congress had approved.
   
   Opportunity Cost: By converting grants into equity, the government foregoes the immediate grant-based economic stimulus those funds would have provided Intel. In other words, Intel gets the benefit of the funding either way, but now the U.S. government also owns a piece of the company.
   
   While this equity stake offers the potential for good financial returns, it is not without risk; if Intel underperforms, the government’s stake could lose value.

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      tsmogposted 2 days agoin reply to this

      “Left with More Questions Than Answers” — A Reflection from the Middle Ground
      
      Sharlee, I appreciate the comparative layout you’ve offered here. It’s clear you’ve done your homework, and I don’t doubt your intent to illuminate what you see as a more strategic approach. Still, as an independent voter who’s not fluent in financial architecture, I find myself circling back to deeper questions—ones that aren’t just economic, but existential.
      
      I’m left wondering:
      
      What does “return on investment” mean when the currency isn’t just dollars, but trust?
      If one approach offers potential dividends and the other offers jobs and infrastructure, how do we measure benefit—not just to the Treasury, but to the soul of the nation? Is ownership of a company more meaningful than ownership of a shared future?
      
      Who truly bears the risk—and who reaps the reward?
      Whether it’s grants or equity, both models seem to rely on Intel’s success. But if things go south, does the average citizen feel the fallout, or is it buffered by layers of abstraction? I ask not as a cynic, but as someone trying to understand how this impacts “me and mine.”
      
      Are we investing in semiconductors—or in a story about control?
      The metaphysical part of me wonders: when the government becomes a shareholder, does it gain influence or illusion? Is this about economic strategy, or about reshaping the narrative of public-private partnership in a way that feels more like empire than stewardship?
      
      I don’t claim expertise, and I’m not here to defend or dismiss either administration. But I do believe that meaning matters—and that sometimes, the most valuable contribution is a question that refuses to be rushed into an answer.
      
      Looking forward to hearing how others interpret this.
      I am sure Ken’s wizardry with global economics may see insights we are not aware of. Again, no expert, while realizing Intel is on the world stage, I inquire: how might the World Economic Forum view Trump’s approach? Doesn' it align with their convictions?

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   Sharlee01posted 2 days ago

   Tim,   I really appreciate the way you framed this—it gets to the heart of why economics and policy are never just numbers on a page. You’re right that “return on investment” isn’t only about dollars; trust and long-term vision matter just as much, if not more. But I’d argue that sometimes the most concrete way to measure trust is through results. If an approach delivers jobs, sparks innovation, and strengthens supply chains, then that becomes trust you can actually see and feel in your community.
   
   On the question of who bears the risk, that’s always the tricky balance between government involvement and private industry. But one side of the coin is that risk exists whether Washington invests directly or not. If Intel succeeds, the benefits ripple outward, jobs, local economies, and national security. If it fails, yes, there’s fallout, but taxpayers already feel that through lost opportunity and reliance on foreign supply chains. In that light, investing strategically isn’t about the illusion of control, but about making sure Americans aren’t left vulnerable to forces beyond their borders.
   
   As for whether this aligns with the World Economic Forum’s worldview—I’d almost flip that. Just because a policy may look like something WEF would applaud doesn’t mean the motivation or execution matches. Of course, we should respect our neighbors and recognize that America is part of a bigger global system. But at the same time, America grew into the strongest nation in the world by being different, by choosing independence, free enterprise, and innovation rather than following the same path as everyone else. That willingness to chart its own course is part of what built our strength, and it’s what allows us to lead today. So while there may be surface-level overlaps in language or optics, the “why” behind the approach matters. A U.S.-first strategy is fundamentally about protecting American workers and industries, not just echoing global talking points.
   
   At the end of the day, I think both the “soul of the nation” and the “spreadsheet math” matter. But the spreadsheet is often the engine that allows the bigger, soul-level values, like independence, dignity of work, and national security, to actually play out in real life.

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      tsmogposted 2 days agoin reply to this

      Thanks for the reply. A long day ahead of me. I will reread before my walk today to contemplate with intention with what was shared. With a glance I am stuck on the perspective of the WEF having likeness to Trump's strategy while the WEF has long been a nemesis of conservative circles. A key element of the WEF is private - public investment is crucial. Parallels are parallels.

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         Sharlee01posted 2 days agoin reply to this

         I am off for a walk too---- it is beautiful in Michigan this morning. Off to the woods with me!

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            tsmogposted 46 hours agoin reply to this

            As I walked this morning, a word kept drifting in like a breeze across a desert floor—sovereignty. Not shouted, just whispered. I’m not yet sure what it wants to teach me, but I suspect it lives somewhere between the spreadsheet and the soul. I’ll ponder that another time.
            
            For now, this is where I find myself: I’ve said often that I’m kicking back, watching chaos theory unfold while entropy tries its hand at prophecy. With Trump’s strategic moves—whether toward corporate acquisition or even just a single share—I keep thinking of the Butterfly Effect. I’ll leave it there. Too much to think about for now, yet another day (?)

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