Latest news with #MackenzieHawkins
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Business Standard
8 hours ago
- Business
- Business Standard
Trump admin in talks to take 10% stake in Intel via Chips Act grants
By Mackenzie Hawkins, Ryan Gould and Josh Wingrove The Trump administration is in discussions to take a stake of about 10 per cent in Intel Corp., according to a White House official and other people familiar with the matter, in a move that could see the US become the beleaguered chipmaker's largest shareholder. The federal government is considering a potential investment in Intel that would involve converting some or all of the company's grants from the US Chips and Science Act into equity, said the people, who asked not to be identified because the information is confidential. Intel has been slated to receive a combined $10.9 billion in Chips Act grants for commercial and military production. That figure is roughly enough to pay for the targeted holding. At Intel's current market value, a 10 per cent stake in the chipmaker would be worth roughly $10.5 billion. The exact size of the stake, as well as whether the White House chooses to move ahead with the plan, is still in flux, the people said. White House spokesman Kush Desai declined to comment on the specifics of the discussions, saying only that no deal is official until it's announced by the administration. The Commerce Department, which oversees the Chips Act, also declined to comment. Intel didn't immediately respond to a request for comment. The White House official also floated the possibility that the administration could convert other Chips Act awards into equity stakes. It's not clear whether that idea has gained traction broadly within the administration or whether officials have broached the possibility with any companies that could be affected. Intel also has attracted an investment from SoftBank Group Corp., which announced plans on Monday to buy $2 billion in the chipmaker's shares. That transaction represents a vote of confidence in Intel from the Japanese tech giant, which is making a broader push to invest in the US. A big question is whether the government assistance will help reinvigorate Intel's business. The company is suffering from stagnant sales and continuing losses, and it has struggled to regain its technological edge in the industry. New Chief Executive Officer Lip-Bu Tan is seeking to turn around the company, but his efforts have largely been focused on cutting costs and eliminating jobs. Intel investors initially applauded news of the government investing in Intel, kicking off the biggest one-week rally in the stock since February. But the shares slipped 3.7 per cent on Monday after Bloomberg reported on the latest discussions. Using the Chips Act money would mean Intel isn't necessarily getting a bigger government infusion than expected — possibly just one that's on a faster timeline. As is the case for all Chips Act winners, Intel's grant money was originally designed to be disbursed over time as the company hits negotiated project milestones. Intel had received $2.2 billion in grant disbursements as of January. It's unclear whether that $2.2 billion would be included in the possible equity stake, whether the company has received additional tranches of its award since President Donald Trump took office, and on what schedule Intel would receive money under a possible equity stake. Most of the grants from the 2022 Chips Act were committed to companies under the Biden administration. Tan met with Trump at the White House last week, helping lay the groundwork for discussions with Intel. The US president had previously taken issue with the executive, calling for Tan's ouster over past ties to China. After the meeting, Trump praised Intel's chief, saying he had 'an amazing story.' And Tan is expected to stay in the job despite the previous criticisms, people familiar with the matter said last week. Intel's future has vexed Trump officials since they first entered office. The pioneering company has fallen behind world leader Taiwan Semiconductor Manufacturing Co. in the production of tiny electronic components that power everything from smartphones to artificial intelligence. That's complicated attempts to revive chip manufacturing in the US after decades of it shifting to Asia. Though TSMC and South Korea's Samsung Electronics Co. are increasing their operations in the US, having an American company like Intel building cutting-edge chips on domestic soil has been a priority for both the Trump and Biden administrations. Officials under President Joe Biden, for example, explored long-shot ideas like a tie-up between Intel and GlobalFoundries Inc. Earlier this year, Trump's team held early-stage conversations with TSMC about potentially operating Intel's factories — an arrangement from which TSMC has backed away. Trump officials have also internally floated the prospect of seeking an Intel investment from the United Arab Emirates. It's unclear whether either of those approaches has progressed much past a thought exercise. If the Trump administration moves forward with an Intel equity stake, that would fit into a recent pattern that's seen Washington take a more aggressive role in strategic sectors. Trump's team secured an agreement to receive a 15 per cent cut of certain semiconductor sales to China and took a so-called golden share in United States Steel Corp. as part of a deal to clear its sale to a Japanese rival. The Intel idea also echoes the Defense Department's unprecedented announcement last month that it will take a $400 million preferred equity stake in the little-known US rare-earth producer MP Materials Corp. That deal would make the Pentagon the company's largest shareholder, with a roughly 15 per cent stake of the firm's shares.
Bloomberg
4 days ago
- Business
- Bloomberg
Trump Let China Use a Key AI Chip. Not So Fast, Beijing Says
Hi, this is Mackenzie Hawkins in Hong Kong. Nvidia sees an opportunity to recoup billions of dollars in China revenue after President Donald Trump agreed to let the chipmaker resume shipments of less-advanced AI accelerators designed specifically for the Asian country.
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Business Standard
12-08-2025
- Business
- Business Standard
China asks companies not to use Nvidia H20 chips in a new guidance
By Mackenzie Hawkins and Ian King China has urged local companies to avoid using Nvidia Corp.'s H20 processors, particularly for government-related purposes, complicating the chipmaker's attempts to recoup billions in lost China revenue as well as the Trump administration's unprecedented push to turn those sales into a US government windfall. Over the past few weeks, Chinese authorities have sent notices to a range of firms discouraging use of the less-advanced semiconductors, people familiar with the matter said, asking not to be named discussing sensitive information. The guidance was particularly strong against the use of H20s for any government or national security-related work by state enterprises or private companies, the people said. In addition to Nvidia, Beijing's overall push affects AI accelerators from Advanced Micro Devices Inc., one of the people said, though it's unclear whether any letters specifically mentioned AMD's MI308 chip. Both companies recently secured Washington's approval to resume lower-end AI chip sales to China, on the controversial and legally questionable condition that they give the US government a 15 per cent cut of the related revenue. Now, Nvidia and AMD face the challenge that their Chinese customers are under Beijing's pressure not to make those purchases. Some of Beijing's letters to companies included a series of questions, according to one of the people, such as why they buy Nvidia H20 chips over local alternatives, whether that's a necessary choice given domestic options, and whether they've found any security issues in the Nvidia hardware. The notices coincide with state media reports that cast doubt on the security and reliability of H20 processors. Chinese regulators have raised those concerns directly with Nvidia, which has repeatedly denied that its chips contain such vulnerabilities. Right now, China's most stringent chip guidance is limited to sensitive applications, a situation that bears similarities to the way Beijing restricted Tesla Inc. vehicles and Apple Inc. iPhones in certain institutions and locations over security concerns. China's government also at one point barred the use of Micron Technology Inc. chips in critical infrastructure. Still, it's possible that Beijing may extend its heavier-handed Nvidia and AMD guidance to a wider range of settings, according to one person with direct knowledge of the deliberations, who said that those conversations are in early stages. AMD declined to comment, while Nvidia said in a statement that 'the H20 is not a military product or for government infrastructure.' China has ample supplies of domestic chips, Nvidia said, and 'won't and never has relied on American chips for government operations.' China's Ministry of Industry and Information Technology and the Cyberspace Administration of China did not respond to faxed requests for comment on this story, which is based on interviews with more than a half-dozen people familiar with Beijing's policy discussions. The White House did not respond to a request for comment outside normal business hours. The Chinese government's posture could make it more difficult for Nvidia and AMD to sell their hardware into the world's largest market for semiconductors. It also raises questions about the Trump administration's explanation for why the US is allowing those exports mere months after effectively banning such sales. Multiple senior US officials have said their policy reversal was part of a trade accord with China, but Beijing has publicly indicated that the resumed H20 shipments were not part of any bilateral deal. China's recent notices to companies suggest that the Asian country may not have desired such a concession from Washington in the first place. Beijing's concerns are twofold. For starters, Chinese officials are worried that Nvidia chips could have location-tracking and remote shutdown capabilities — a suggestion that Nvidia has vehemently denied. Still, Trump officials are actively exploring whether location-tracking could be used to help curtail suspected smuggling of restricted components into China, and lawmakers have introduced a bill that would require location verification for advanced AI chips. Second, Beijing is intensely focused on developing its domestic chip capabilities, and wants Chinese companies to shift away from Western chips in favor of local offerings. Officials have previously urged Chinese firms to choose domestic semiconductors over Nvidia H20 processors, Bloomberg reported last September, and have introduced energy efficiency standards that the H20 chip does not meet. But Beijing has stopped short of outright banning the hardware, which Nvidia designed specifically for Chinese customers to abide by years of US curbs on sales of advanced chips to the Asian country. The H20 chip has less computational power than Nvidia's top offerings, but its strong memory bandwidth is quite well suited to the inference stage of AI development, when models recognize patterns and draw conclusions. That's made it a desirable product to companies like Alibaba Group Holding Ltd. and Tencent Holdings Ltd. in China, where domestic chip champion Huawei Technologies Co. is struggling to produce enough advanced components to meet market demand. By one estimate from Biden officials — who considered but did not implement controls on H20 sales — losing access to that Nvidia chip would make it three to six times more expensive for Chinese companies to run inference on advanced AI models. 'Beijing appears to be using regulatory uncertainty to create a captive market sufficiently sized to absorb Huawei's supply, while still allowing purchases of H20s to meet actual demands,' said Lennart Heim, an AI-focused researcher at RAND, of China's push for companies to avoid American AI chips. 'This signals that domestic alternatives remain inadequate even as China pressures foreign suppliers.' President Donald Trump on Monday called the H20 chip 'obsolete,' saying that China 'already has it in a different form.' That echoed previous statements by officials in his administration, who defended the decision to resume H20 exports on the grounds that Huawei already offers comparable chips to the H20. The US should keep the Chinese AI ecosystem reliant on less-advanced American technology for as long as possible, these officials argue, in order to deprive Huawei of the revenue and know-how that would come from a broader customer base. Commerce Secretary Howard Lutnick and other Trump officials have also claimed that the H20 move was part of a deal to improve American access to Chinese rare-earth minerals — despite the Trump team's previous assertions that such an arrangement was not on the table. 'As the Chinese deliver their magnets, then the H20s will come off,' Lutnick said last month. Treasury Secretary Scott Bessent said in late July that the magnet issue had been 'solved.' The first Nvidia H20 and AMD MI308 licenses arrived a bit over a week after Bessent's declaration — after Nvidia Chief Executive Officer Jensen Huang met with the president and both companies agreed to share their China revenue with the US government.
Bloomberg
15-07-2025
- Business
- Bloomberg
Nvidia's AI Chips Are Returning to China After Huang and Trump Meet
Welcome to Tech In Depth, our daily newsletter about the business of tech from Bloomberg's journalists around the world. Today, Mackenzie Hawkins looks at the reversal from the Trump administration on a subject that US officials had repeatedly said was not up for discussion. CoreWeave's power need: CoreWeave is expanding a data center that is projected to double the electricity needs of a city near Dallas, another example of the strains on the US power grid from the stampede for AI capacity.
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Business Standard
18-06-2025
- Business
- Business Standard
US-China tech fight widens after Taiwan blacklists Huawei, chipmaker SMIC
By Mackenzie Hawkins, Miaojung Lin and Yian Lee Taiwan joined a yearslong US campaign to curtail China's technological ascent when it blacklisted the country's AI and chipmaking champions, an unprecedented step that may signal a resurgent effort to isolate its powerful neighbor's semiconductor sector. Taipei this month added Huawei Technologies Co. and its main chipmaker Semiconductor Manufacturing International Corp. to its entity list, barring the island's firms from doing business with the pair without a licence. It was the first time Taiwanese officials have used that blacklist to sanction major Chinese firms, taking a cue from a longstanding US approach of blocking access to advanced technologies. The move also marks Taipei's first public action on semiconductor restrictions since President Lai Ching-te pledged in April to address unspecified concerns from Washington about export controls. President Donald Trump's administration has urged Taipei to take more ownership over chip restrictions on China, people familiar with the matter said, with a particular focus on enforcement of existing curbs. They requested anonymity as they weren't authorized to speak publicly. A congressional committee focused on China, meanwhile, said after Taipei's move that the US 'must continue working with our partners to ensure the CCP's attempts to illegally transfer tech are stopped cold.' Taipei's decision may be the first of a series of measures tightening the flow of technology to China, marking a departure from a policy of nurturing cross-Strait business ties. The longer-term goal may be to throttle supply of the vital components, silicon materials and plant construction expertise that helped transform Taiwan Semiconductor Manufacturing Co. into the world's most advanced chip operation. 'This recent shift marks a substantive move toward strategic technological competition with China,' said Chiang Min-yen, an analyst at Taiwan's government-funded Research Institute for Democracy, Society and Emerging Technology. 'Compared to other tech democracies with similar industrial structures — such as Japan and South Korea — Taiwan is now taking a more decisive stance.' Lai didn't specify in his April comments what steps Taiwan would take in response to US concerns, but instead described a broader strategy to boost trade relations with the US. It's unclear whether the Huawei and SMIC sanctions are related to ongoing tariff negotiations with Washington, or whether the US requested that specific step. The US Department of Commerce, White House and Taiwan's Office of Trade Negotiations didn't respond to requests for comment. 'The DPP authorities' kneeling and ingratiating themselves with the US will only hurt and ruin Taiwan's interests,' Foreign Ministry spokesman Guo Jiakun told a press briefing in Beijing, referring to the ruling party in Taipei. 'China opposes the US politicizing tech and trade issues, overstretching the concept of national security, abusing export control and long-arm jurisdiction, and maliciously blocking and suppressing China.' The US has pressured Taiwan to do more since Trump's first term, when officials urged Taipei to block sales of TSMC chips to China — before Washington imposed restrictions on some of TSMC's shipments to the world's second-largest economy. Under President Joe Biden, the US continually ramped up those China controls, which span both chips and the tools used to make them. Many of the US measures use an authority known as the foreign direct product rule to restrict some activities of foreign firms — including Taiwanese ones — whose products contain even the tiniest bit of American tech. The White House would support any steps its allies take to prevent the circumvention of controls, an administration official said. One major focus for American officials — under Trump as well as his predecessor — is ensuring that Taipei cracks down on TSMC sales that are restricted under US rules, said people familiar with the matter, who asked not to be named discussing private conversations. Last year, TSMC, the go-to chipmaker for Apple Inc. and Nvidia Corp., unwittingly manufactured 2.9 million AI dies for Huawei, based on estimates from researchers. Those semiconductors were routed via an intermediary that has since been sanctioned by the US government and cut off by TSMC, which is cooperating with Washington's ongoing investigation into the matter. But there also are a host of other business activities not captured by Washington's curbs — things like construction contracts or sales of certain components. In 2023, Bloomberg News reported that several Taiwanese companies were helping Huawei build infrastructure for an under-the-radar network of chip plants across southern China. Taiwanese officials said they would probe into those companies shortly after, but they've refrained from taking significant action — until now. It's unusual for Beijing's neighbors, who still see China as a crucial trading partner, to openly target its most strategic companies. While Japan joined a US-led campaign to limit China's access to advanced chipmaking equipment, neither Tokyo nor Seoul has blacklisted Huawei or SMIC entirely. On its face, Taiwan's entity list action doesn't immediately upend routine business, in part because it doesn't apply to mainland-registered operations. Many Taiwanese companies have set up local subsidiaries to handle their business in mainland China over the years, and Taipei doesn't have jurisdiction over such entities. 'I don't expect this announcement will cause any material impact for either Taiwan or Huawei and SMIC,' said Bloomberg Intelligence analyst Steven Tseng. 'Huawei and SMIC don't really rely on Taiwan as they should have established a pretty decent level of 'local sourcing' in China after all these years.' The new president has been working to reduce economic interdependence between China and Taiwan. His Democratic Progressive Party released a video over the weekend arguing that Taiwanese companies should look to diversify away from China — a shift from decades of the island's firms establishing a substantial presence on the mainland. Foxconn Technology Group built the world's largest iPhone assembly campus in central China, while TSMC runs chipmaking sites in Shanghai and Nanjing. Tensions escalated after Lai was elected last year. Beijing has accused him of seeking independence and destabilizing the region. Bilateral ties were further strained after Lai labeled China a 'foreign hostile force' for the first time and unveiled wide-ranging measures to counter infiltration efforts. China claims the self-governing democracy is its territory and has vowed to unify with Taiwan, using force if necessary — a stance Taiwan rejects. Taiwan's annual investment in China peaked at $14.6 billion in 2010, though that spending plummeted to $3.6 billion last year. 'Lai will now be able to speed up his agenda-setting against China on several fronts including defense, trade and tech, thanks to the changes in the global environment,' said Soong Hseik-wen, director of the Center for National Policy Research at Taiwan's National Chung Cheng University.
