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US Intel

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539 points maguay | 2 comments | 26 Aug 25 10:47 UTC | HN request time: 0s | source
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onetimeusename ◴[26 Aug 25 17:21 UTC] No.45029567[source]▶
The other day when the US's stake in Intel was announced, people assumed it was a political stunt. I suspected it was because of national security interests. The CHIPS act probably didn't get the result US Defense wanted quickly enough. Some details that were glossed over include that there was a chip shortage a few years ago as a result of COVID and TSMC supply chain disruptions that led to a shortage in electronics and automobiles even. This started to look like a national security interest back then.

Second, there is an AI race going on. US intelligence is taking it very seriously and views supremacy of our AI as very important. Recently, the US was pushing NVDA to start using Intel's foundry. I assume it's for national security reasons.

Finally, a couple of details from the Intel deal that were not widely discussed is that the US is taking a passive seat[1]

The government’s investment in Intel will be a passive ownership, with no Board representation or other governance or information rights. The government also agrees to vote with the Company’s Board of Directors on matters requiring shareholder approval, with limited exceptions.

There are also warrants being given whose status is based on Intel's foundry. That suggests the foundry was the interest all along.

[1]: https://www.intc.com/news-events/press-releases/detail/1748/...

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bigyabai ◴[26 Aug 25 17:31 UTC] No.45029693[source]▶
> Recently, the US was pushing NVDA to start using Intel's foundry. I assume it's for national security reasons.

The real reason is simple, if you've been following IFS: Intel's foundry has no large customers. The free market has spoken and almost every single customer prefers TSMC or Samsung silicon. America was boxed-out of serious world-class chip manufacturing ever since Intel swerved on EULV. If it was for natsec reasons then I doubt the fed would waste their time taking a passive seat when they could claim Intel as eminent domain.

It's not about national security whatsoever; this is part of a last-ditch effort to force Apple and Nvidia to buy American silicon.

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onetimeusename ◴[26 Aug 25 17:52 UTC] No.45029958[source]▶
I'm not sure they need to claim Intel as eminent domain and that type of move is beyond what I know about but I suppose they could've done that previously but opted instead for market based solutions like with the CHIPS Act. That is really what led to the equity stake. The purpose of the CHIPS Act had more to do with the AI Cold War and securing the supply chain than it did trying to save one particular business. So I believe national security is the major concern and not saving one particular business.
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1. bigyabai ◴[26 Aug 25 17:56 UTC] No.45030001[source]▶
> The purpose of the CHIPS Act had more to do with the AI Cold War and securing the supply chain than it did trying to save one particular business

I just don't think we're ever going to see eye-to-eye if this is your belief. In realpolitiks terms, Intel hasn't been a player on the AI board since Gaudi. And even that was a total flop.

If securing AI compute was the goal, buying Intel is about as large of a mistake as you can possibly make. Even Samsung has more skin in the game at this point. The only logical explanation, given Intel's history, is that they're desperate for customers and need help from the fed. If this is our plan to win the "AI cold war" then we've already lost.

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2. onetimeusename ◴[26 Aug 25 18:14 UTC] No.45030227[source]▶
I think it's simpler than that. I think US intelligence is looking to make sure a secure supply chain exists for AI and really that just means NVDA's chips. I have never stated at any point this plan would work well. This is all stated in the reasoning for the CHIPS Act. That may mean pressuring people to use the foundry but I don't actually think the concern was chiefly to win back jobs. The funding from the CHIPS Act was actually withheld since Intel wasn't making satisfactory progress. Also the warrants I mentioned are executable only if Intel drops it's stake in the foundry. I believe this was added since there was talk of Intel spinning that out. So the government seems very interested in the viability of the foundry and less so in jobs.

So my point is that I think US Defense is motivated by national security interests but that doesn't mean this plan is going to work well or that we haven't already lost the AI war. It's probably too little too late. I am just pointing out over and over that I don't think grandstanding is the motive. I am sure that will happen but I think at some point it hit US Defense that relying on Taiwan put's us in a precarious situation.