Palantir cofounder on the US taking a stake in Intel: 'The whole thing is very weird'

Joe Lonsdale, co-founder of Palantir and a founding partner at Austin-based venture capital firm 8VC, expressed his unease regarding the U.S. government's recent $8.9 billion investment in Intel. During an appearance on CNBC's Squawk Box, Lonsdale remarked, "It's very weird, of course, for the government to be taking a stake in something. It's also a little bit strange for the government to be giving $9 billion to a company, too." He further characterized the move as a form of cronyism, a term used to describe the practice of favoring friends in terms of job placements and benefits. This substantial funding is part of the U.S. CHIPS and Science Act, a legislation enacted in 2022, which allocates $52 billion in subsidies and tax incentives aimed at bolstering domestic semiconductor production and factory development. Intel clarified in a press release that the government's equity stake will be sourced from the remaining $5.7 billion in grants already awarded but yet to be disbursed, as well as $3.2 billion allocated through the Secure Enclave program. This program is intended to enhance semiconductor manufacturing capabilities within the U.S. Such government investments in private companies are quite rare and usually occur during periods of significant economic distress, like the 2008 financial crisis. The current investment, however, comes at a time when the nation is not in a crisis, potentially signaling a new economic approach. National Economic Council Director Kevin Hassett suggested last month on CNBC that additional investments in various companies could follow this precedent, comparing the Intel stake to a sovereign wealth fund model, which many countries utilize to invest in businesses and redistribute profits to their citizens. Lonsdale remains skeptical unless there is a clear public benefit, particularly in terms of enhancing national security. He stated, "If that's the case, there's no reason for the government not to take things."