After the US government bought the share ownership of Intel, there was a stir in competing companies. Intel's response is that this move of the government will affect the international market.
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Experts have pointed out that an unexpected turn has occurred in the relationship between the government and the private sector, with the US government deciding to buy the shares of Intel, the chip maker. Intel has warned that this move of the government will lead to negative consequences. The US government is going to buy 9.9 percent of Intel's share ownership.
The US government under the leadership of President Donald Trump has decided to convert an 11 billion dollar government grant to Intel into equity ownership.
Earlier, the government decided to give a subsidy of 11 billion dollars to help the company that is facing financial difficulties, but now that amount is not in the form of a subsidy, but in return, the government will take some ownership of Intel . This means, the US government will now become a shareholder of Intel .
Trump has announced similar partnerships with many other companies, not just Intel. It is mentioned in the news of The New York Times that it caused a wave among Intel's competing companies . Trump is also asking Intel CEO Lip-Boo Tan to resign.
Some people have analyzed that it is not appropriate for the government to intervene to this extent in private sector companies. The White House said that such a move has been made considering the importance of semiconductor chips in the American economy and Intel's unique position in the market.
Trump has also accused Intel chief Tan of being close to the Chinese government. ``People come to America looking for something,'' he said, pointing to Tan, ``I predict that there will be more deals like this.''
After the American government became an important shareholder, Intel's non-American business may be affected, the company complains. In a video posted by the US Department of Commerce, Intel CEO Tan responded that he does not want US government subsidies. Softbank invested $2 billion in Intel just three days before the US government announced it would buy the company's shares.
The Trump government previously invested in a mining company called MP Materials in July. However, the US government's decision to buy Intel's shares has been cited by the New York Times as the largest government intervention in a private company since the 2008 financial crisis. At that time, the American government helped save companies like Chrysler and General Motors, which were in a sinking situation.
It seems that Trump keeps some conditions for his own benefit when companies facing financial difficulties need help. For example, Japan's Nippon Steel has agreed to give the US government a 'golden share' to buy US steel. This gives him the right to influence future decisions of the company .
Similarly, Trump has made it clear to the companies that chip manufacturers including Nvidia should give 15 percent of the income from chip sales in China to the government. US Department of Commerce officials are studying how it can be legally enforced.
