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CNBC
17 minutes ago
- CNBC
Trump administration weighs 10% stake in Intel via Chip Act grants, making government top shareholder
The Trump administration is discussing taking a 10% stake in Intel, according to a Bloomberg report on Tuesday, in a deal that could see the U.S. government become the chipmaker's largest stakeholder. As part of a potential deal, the government is also considering converting some or all of Intel's grants from the 2022 U.S. CHIPS and Science Act into equity in the company, the report said, citing a White House official and other people familiar with the matter. At the embattled chipmaker's current market value, a 10% stake would be worth roughly $10.4 billion. Meanwhile, Intel has been awarded about $10.9 billion in Chips Act grants, including $7.9 billion for commercial manufacturing and $3 billion for national security projects. The report noted, however, that it remains unclear if the idea has gained traction broadly within the administration or whether officials have broached the possibility with affected companies. It added that the exact size of the stake remains in flux, and it remains unclear whether the White House will actually proceed with the plan. Intel and the White House did not immediately respond to CNBC's queries regarding the report. Intel, once a dominant force in the U.S. chip industry, has fallen behind global competitors in advanced chip manufacturing. Reviving the former U.S. chip champion has become a national priority in Washington, with reports about a potential government stake in the company first circulating last week. The company has been the largest recipient of the 2022 Chips Act, passed with bipartisan support under the Biden administration, as part of efforts by Washington to revitalize U.S. leadership in semiconductor manufacturing. The bill allocated $39 billion in grants for American semiconductor manufacturing projects, with funding committed to many of the world's chipmakers such as TSMC and Samsung, as well as American chip companies such as Nvidia, Micron and GlobalFoundries. U.S. President Donald Trump, though supporting the general goals of the Chips Act, has been a vocal critic of the bill and even called for its repeal earlier this year. While republican lawmakers in Washington have been reluctant to act on that call, U.S. Commerce Secretary Howard Lutnick said in June that the administration was renegotiating some of the bill's grants. If Intel's Chip Act funds were to be converted into a potential government stake in the company, it could decrease the total amount of capital infused into the company as part of any deal by Washington. However, it would serve as the latest example of the Trump administration's interest in building government-backed national champions in strategic industries. Intel has struggled to gain an advantage in the artificial intelligence boom and has yet to capture a significant customer for its manufacturing business despite spending heavily on it. Some analysts have argued that government intervention is essential for the struggling chipmaker and for the sake of U.S. national security. Others contend that Intel's problems are deeper than funding, and it is not clear how the government can help with that. Analysts have also noted that Trump may be able to sway companies to buy Intel chips or assist indirectly, through tariffs and regulation. On Tuesday, it was announced that SoftBank was investing $2 billion in Intel. According to LSEG, the investment is worth about 2% of Intel, making SoftBank the fifth-biggest shareholder. Masayoshi Son, Chairman & CEO of SoftBank Group, said: "This strategic investment reflects our belief that advanced semiconductor manufacturing and supply will further expand in the United States, with Intel playing a critical role." Intel investors had initially welcomed news of the government investment, which resulted in a share rally of nearly 9% on Aug. 14. Shares of Intel fell over 3% on Monday on the Bloomberg report, but rebounded by more than 5% in overnight trading on the trading platform Robinhood following news of a Softbank investment. Intel CEO Lip-Bu Tan, who was appointed in March 2025, met with Trump at the White House last week, after the U.S. president had called for his ousting due to his past ties to China. After the meeting, Trump had changed his tune on the Intel chief, saying he had "an amazing story." It's unclear if a potential government stake in the company had been discussed at the time. Read the full Bloomberg story here.
Yahoo
19 minutes ago
- Yahoo
Amazon cloud chief says replacing junior employees with AI is the 'dumbest thing I've ever heard'
Don't replace your junior employees with AI, said Amazon cloud chief. "They're the most leaned into your AI tools," said Matt Garman. The CEO of Amazon Web Services also said cutting junior staff for AI could wreck future talent pipelines. Matt Garman, Amazon's cloud boss, has a warning for business leaders rushing to swap workers for AI: Don't ditch your junior employees. The Amazon Web Services CEO said on an episode of the "Matthew Berman" podcast published Tuesday that replacing entry-level staff with AI tools is the "dumbest thing I've ever heard." "They're probably the least expensive employees you have. They're the most leaned into your AI tools," he said. "How's that going to work when you go like 10 years in the future and you have no one that has built up or learned anything?" Garman said companies should keep hiring graduates and teaching them how to build software, break down problems, and adopt best practices. He also said the most valuable skills in an AI-driven economy aren't tied to any one college degree. "If you spend all of your time learning one specific thing and you're like, 'That's the thing I'm going to be expert at for the next 30 years,' I can promise you that's not going to be valuable 30 years from now," he said. Instead, he said students should focus on developing critical reasoning, creativity, and the ability to adapt as technology evolves. Garman and Amazon did not respond to a request for comment from Business Insider. AI is coming for junior employees Tech leaders have been vocal about how AI could replace the work of entry-level staff. OpenAI CEO Sam Altman said in June that AI is already beginning to act like junior-level coworkers. "You hear people that talk about their job now is to assign work to a bunch of agents, look at the quality, figure out how it fits together, give feedback, and it sounds a lot like how they work with a team of still relatively junior employees," Altman said of AI agents during the Snowflake Summit 2025. Google's chief scientist, Jeff Dean, said earlier this year that AI will soon be able to replicate the skills of a junior software engineer, adding that it could happen within the next year. The pressure is also showing up in data. According to Goldman Sachs, the unemployment rate for 20- to 30-year-olds in tech has risen by nearly 3 percentage points since early 2024, over four times the increase in the overall jobless rate. "While this is still a small share of the overall US labor market, we estimate that generative AI will eventually displace 6-7% of all US workers," Jan Hatzius, Goldman Sachs' chief economist, wrote in August. Others don't agree that junior staff are expendable. GitHub CEO Thomas Dohmke said last month that young engineers frequently bring fresh perspectives and are more likely to have been early adopters of AI. "Folks that go to high school now, or to college, or even kids earlier in their education, they get to use AI much faster," Dohmke said in a July episode of "The Pragmatic Engineer." "They get it because they are taking this with an open mind. They don't have the, 'This is how we've always done it,'" he added. Read the original article on Business Insider Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNBC
25 minutes ago
- CNBC
Gold steadies ahead of Fed's Jackson Hole summit
Gold prices were little changed on Tuesday as investors awaited the Federal Reserve's annual conference this week for cues into possible rate cuts, and weighed Washington's efforts to end the war in Ukraine. Spot gold held steady at $3,331.49 per ounce as of 0201 GMT. U.S. gold futures for December delivery fell 0.1% to $3,375.40. Fed Chair Jerome Powell's remarks at the central bank's symposium on August 21-23 in Wymoing could offer clarity on the economic outlook and expectations of policy easing. "Gold is still consolidating and is really waiting for a new catalyst to break higher. I think the big event to watch is Jackson Hole and whether the Fed brings the dovish guidance or not," said Kyle Rodda, financial market analyst. Market participants currently see an 84% probability of a 25-basis-point rate cut at the Fed's next meeting, per the CME FedWatch tool. Gold typically performs well in a low-interest-rate environment and amid heightened uncertainties. Minutes from the Fed's July meeting, due for release on Wednesday, are expected to provide additional cues into its policy. On Monday, U.S. President Donald Trumptold President Volodymyr Zelenskiy that Washington would help guarantee Ukraine's security in any potential deal to end Russia's war. This assurance followed Trump's meeting with Russian President Vladimir Putin in Alaska, which ended without an agreement. Trump described his meeting with Zelenskiy as "very good", and, in a social media post, said he had called the Russian leader and begun arranging a meeting between Putin and Zelenskiy. "In the unlikely event some sort of deal gets struck (between Ukraine and Russia), that could be a very negative surprise for the gold price," Rodda said. Elsewhere, spot silver fell 0.5% to $37.82 per ounce, platinum rose 0.1% to $1,323.76 and palladium lost 0.9% to $1,112.34.
