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Intel has become a political issue following CEO Lip-Bu Tan’s meeting with President Trump. Reports suggest the government is considering acquiring a stake in Intel to fund domestic chip manufacturing projects such as the Ohio facility. However, when the government invests in a corporation, it usually requires more than just a simple decision. The deal would likely need Congress’s approval or a bailout package for Intel.
A bailout might not be feasible at this time since Intel’s finances are stable. In 2009, during the Great Financial Crisis, the U.S. Treasury bought a stake in General Motors as part of a bailout under TARP (Troubled Asset Relief Program). GM had to declare Chapter 11 bankruptcy and develop a viability plan.
The situation with Intel is different; it isn’t in the same financial position as GM was then. One possibility could be if a U.S. department, such as the Department of Defense (DoD), acquires a stake, similar to what happened under the DoD-MP Materials deal. That venture didn’t require Congress’s approval because DoD had pre-approved funding authority through DPA.
For President Trump and his administration to get an Intel stake, they would need congressional approval to arrange the necessary funding, as setting up facilities requires “billions of dollars.” Even in GM’s case, the auto bailout portion was part of a congressional debate. Given the legal procedures involved, securing Congressional approval for Intel’s stake acquisition could be time-consuming.
*Image Credits: Intel*
