Some investors are not happy that Intel agreed to sell the US a 10 percent stake in the company after Donald Trump attacked Intel CEO Lip-Bu Tan with a demand to resign.
After Intel accepted the deal at a meeting with the president, it alarmed some investors when Trump boasted that his pressure campaign worked, claiming Tan "walked in wanting to keep his job, and he ended up giving us $10 billion for the United States."
"It sets a bad precedent if the president can just take 10 percent of a company by threatening the CEO," James McRitchie, a private investor and shareholder activist in California who owns Intel shares, told Reuters. To McRitchie, Tan accepting the deal effectively sent the message that "we love Trump, we don't want 10 percent of our company taken away."
McRitchie wasn't the only shareholder who raised an eyebrow. Kristin Hull, chief investment officer of a California-based activist firm called Nia Impact Capital—which manages shares in Intel for its clients—told Reuters she has "more questions than confidence" about how the deal will benefit investors. To her, the deal seems to blur some lines "between where is the government and where is the private sector."
As Reuters explains, Intel agreed to convert $11.1 billion in CHIPS funding and other grants "into a 9.9 percent equity stake in Intel."
Some early supporters of the agreement—including tech giants like Microsoft and Trump critics like Bernie Sanders (I-Vt.)—have praised the deal as allowing the US to profit off billions in CHIPS grants that Intel was awarded under the Biden administration. After pushing for the deal, Commerce Secretary Howard Lutnick criticized Joe Biden for giving away CHIPS funding "for free," while praising Trump for turning the CHIPS Act grants into "equity for the Trump administration" and "for the American people."