Uncomfortable and very ..., says Palantir cofounder on US government taking stake in Intel

Palantir cofounder Joe Lonsdale

has criticised the decision of US government to take an equity stake in Intel. Lonsdale called the move ‘uncomfortable and very concerning’ and warned that it smacks of “cronyism.” Speaking to CNBC’s Squawk Box, Lonsdale — who is also founding partner of Austin-based

venture capital firm 8VC

said that it was quite unusual for the government to take an equity stake in a major technology company outside of a crisis. “It’s very weird, of course, for the government to be taking a stake in something,” Lonsdale said. “It’s also a little bit weird for the government to be giving $9 billion to a company, too. It’s cronyism in some form.”

Funded by the CHIPS Act

The investment made by the US government is being primarily finance via the Chips and Science Act, which a 2022 law which allocates $52 billion in subsidies and tax incentives to boost domestic semiconductor production. Intel said in a press release that the government’s equity stake will be funded by: - $5.7 billion in previously awarded but unpaid CHIPS Act grants

- $3.2 billion from the Secure Enclave program, aimed at expanding U.S.

semiconductor manufacturing capacity

A rare move outside a crisis

“It's very weird, of course, for the government to be taking a stake in something. It's also a little bit weird for the government to be giving $9 billion to a company, too,” Lonsdale said on CNBC's Squawk Box. The direct government ownership in private companies is rare in then US and it is happening during severe economic distress. The Intel deal however, comes during a period of relative stability, raising questions about whether it sets a new precedent for industrial policy. National Economic Council Director Kevin Hassett recently likened the move to a sovereign wealth fund strategy, suggesting more such investments could follow in other industries.

Debate over public benefit

Lonsdale said he could have supported the arrangement if it advanced national security of other public interests. “If that’s the case, there’s no reason for the government not to take things,” he noted — but stressed that without such justification, the deal risks blurring the lines between public policy and corporate favouritism.