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Trump Eyes Government Control of Quantum Computing Firms With Intel-Like Deals
Donald Trump is eyeing taking equity stakes in quantum computing firms in exchange for federal funding, The Wall Street Journal reported.
At least five companies are weighing whether allowing the government to become a shareholder would be worth it to snag funding that the Trump administration has "earmarked for promising technology companies," sources familiar with the potential deals told the WSJ.
IonQ, Rigetti Computing, and D-Wave Quantum are currently in talks with the government over potential funding agreements, with minimum awards of $10 million each, some sources said. Quantum Computing Inc. and Atom Computing are reportedly "considering similar arrangements," as are other companies in the sector, which is viewed as critical for scientific advancements and next-generation technologies.
No deals have been completed yet, sources said, and terms could change as quantum-computing firms weigh the potential risks of government influence over their operations.
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Trump official plots "impossible" deal moving Taiwan's chip supply chain into US:
The Trump administration is pressuring Taiwan to rapidly move 50 percent of its chip production into the US if it wants ensured protection against a threatened Chinese invasion, US Commerce Secretary Howard Lutnick told NewsNation this weekend.
In the interview, Lutnick noted that Taiwan currently makes about 95 percent of chips used in smartphones and cars, as well as in critical military defense technology. It's bad for the US, Lutnick said, that "95 percent of our chips are made 9,000 miles away," while China is not being "shy" about threats to "take" Taiwan.
Were the US to lose access to Taiwan's supply chain, the US could be defenseless as its economy takes a hit, Lutnick alleged, asking, "How are you going to get the chips here to make your drones, to make your equipment?"
"The model is: if you can't make your own chips, how can you defend yourself, right?" Lutnick argued. That's why he confirmed his "objective" during his time in office is to shift US chip production from 2 percent to 40 percent. To achieve that, he plans to bring Taiwan's "whole supply chain" into the US, a move experts have suggested could take much longer than a single presidential term to accomplish.
In 2023, Nvidia CEO Jensen Huang forecast that the US was "somewhere between a decade and two decades away from supply chain independence," emphasizing that "it's not a really practical thing for a decade or two."
Lutnick acknowledged this will be a "herculean" task. "Everybody tells me it's impossible," he said.
To start with, Taiwan must be convinced that it's not getting a raw deal, he noted, explaining that it's "not natural for Taiwan" to mull a future where it cedes its dominant role as a global chip supplier, as well as the long-running protections it receives from allies that comes with it.
"What's natural for Taiwan is we produce 95 percent" and "we feel great about it," Lutnick said, conceding that "you can imagine when someone has 95 percent, convincing them that they should only have 50 percent. That's a lot" to lose.
But "Donald Trump would say it's not healthy for you or healthy for us because we protect you, and for us to protect you," then "you need to help us achieve... reasonable self-sufficiency," Lutnick argued.
To close the deal with Taiwan, Lutnick suggested that the US would offer "some kind of security guarantee" so that "they can expect" that moving their supply chain into the US won't eliminate Taiwan's so-called "silicon shield," where countries like the US are willing to protect Taiwan because "we need their silicon, their chips, so badly."
According to Lutnick, Taiwan can also be assured through the deal that the US will remain "fundamentally reliant" upon Taiwan, as the producer of the other 50 percent of chips.
However, he also claimed that if the US acquired a 50 percent market share, it would ensure that the US has "the semiconductors we need for American consumption," emphasizing that the move is intended to decrease reliance on Taiwan. Lutnick also went on in the interview to explain how US workers would benefit from moving Taiwan's supply chain into the US, saying that another major focus of his time in office will be training workers to help the domestic semiconductor industry flourish.
"I think it will shock everybody how successful we are," Lutnick said.
The Taiwan Semiconductor Manufacturing Company (TSMC), along with "its giant ecosystem of suppliers," Bloomberg noted, "together make and supply the vast majority of the world's most advanced chips."
Earlier this year, TSMC committed to investing $100 billion in chip manufacturing plants in the US in an effort to appease Trump. Production of its most advanced chips remained in Taiwan, however, as TSMC has for years claimed that talent in the US is insufficient, bringing in overseas workers and fueling tensions with US workers, who accuse TSMC of undercutting US unions.
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Trump threatens taxes, bans, for nations that tax Big Tech:
Trump took to Truth Social on Monday evening to declare "As the President of the United States, I will stand up to Countries that attack our incredible American Tech Companies."
"Digital Taxes, Digital Services Legislation, and Digital Markets Regulations are all designed to harm, or discriminate against, American Technology. They also, outrageously, give a complete pass to China's largest Tech Companies," he added.
"This must end, and NOW!" his post continued, before promising "substantial additional Tariffs" on any nation that dares to persist with regulations, plus "Export restrictions on our Highly Protected Technology and Chips."
"America, and American Technology Companies, are neither the 'piggy bank' nor the 'doormat' of the World any longer," he added, before wrapping things up with a demand to "Show respect to America and our amazing Tech Companies or, consider the consequences!"
The post makes no mention of the following known facts about American Big tech companies:
- Most are extraordinarily profitable;
- Most use legal-but-cynical schemes to minimize tax, which is why many nations devised digital services taxes and other measures to ensure Big Tech pays its share;
- The USA pulled out of the OECD's comprehensive tax reforms, which aimed to prevent global companies – especially tech companies – from using legal-but-cynical schemes to minimize tax. Doing so meant other nations who wanted to tax Big Tech needed to consider other measures;
- Several American tech companies are proven monopolists who abused market power at home and abroad;
- Several offer services known to be harmful – especially social media companies – creating problems that other nations must pay to fix;
- Chinese companies do not get a free pass: Many nations have regulated them with acts such as banning Huawei. Europe just took a swipe at AliExpress. We could go on but you get the idea;
- Trump himself has given Chinese company ByteDance and its social network TikTok a free pass by declining to enact a law that required it to divest its US operations or shut up shop stateside by January 19th, 2025. US Congress passed that law after finding TikTok is a threat to national security.
We could go on, but you get the idea. America's tech companies are immensely powerful, efforts to rein them in have seldom succeeded, and China does not get a free pass.
Trump has made threats like this before, but this time he has raised the stakes by adding the prospect of tech export bans.
Such bans would likely harm other US tech companies. Chipmakers aren't subject to digital services taxes, and lost billions when the administration banned sales of all GPUs to China. A comprehensive tech export ban could defend Google and Meta by hurting Intel – which the USA now partially owns – and the likes of Nvidia and AMD.
Recent history suggests two possible outcomes: The world will try to negotiate with Washington about this matter and end up making modest concessions the president claims as a win, or nothing happens because Trump's posts are often thought bubbles.
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Per Bloomberg (Alternate sources: CNBC and Reuters), the Trump Administration is weighing the US government potentially buying a stake in Intel. As CNBC reports:
Intel is the only U.S. company with the capability to manufacture the fastest chips on U.S. shores, although rivals including Taiwan Semiconductor Manufacturing Company and Samsung also have U.S. factories. President Donald Trump has called for more chips and high technology to be manufactured in the U.S.
The government's stake would help fund factories that Intel is currently building in Ohio, according to the report.
This comes a week after Donald Trump called for Intel CEO Lip-Bu Tan to resign. While the reason behind Trump's call for Tan's resignation was not entirely clear, it is believed that it was due to Tan's investments in Chinese businesses. From CBS:
"The CEO of Intel is highly CONFLICTED and must resign, immediately," Mr. Trump posted on Truth Social, without providing additional details. "There is no other solution to this problem. Thank you for your attention to this problem!"
The president's call for Tan's resignation comes after Sen. Tom Cotton, a Republican from Arkansas, sent a letter to Intel Chairman Frank Yeary on Tuesday expressing concern over Tan's investments and ties to Chinese businesses.
"Mr. Tan reportedly controls dozens of Chinese companies and has a stake in hundreds of Chinese advanced-manufacturing and chip firms," Cotton wrote in the letter. "At least eight of these companies reportedly have ties to the Chinese People's Liberation Army."
Tan is an American citizen who was born in Malaysia, spent his youth in Singapore, and attended graduate school at MIT where he received a degree in nuclear engineering. Despite the comments about Tan last week, Trump's position on Tan remaining CEO of Intel seemed to soften earlier this week following a meeting between them (Alternate sources: AP and CNBC). From the New York Times article:
After the afternoon meeting at the White House, Mr. Trump posted on Truth Social that his discussion with Mr. Tan "was a very interesting one," though he did not elaborate. Mr. Trump said that Mr. Tan and cabinet members would meet next week and "bring suggestions to me," adding that the Intel chief's "success and rise is an amazing story."
Mr. Trump's post appeared to signal that he was changing his mind about any national security risk posed by Mr. Tan, 65, who became Intel's chief executive in March. Mr. Trump's call last week for Mr. Tan to resign, citing his past investments in Chinese companies, was one of the first times the president had attempted to directly intervene to change the leadership at a major publicly traded company.
The report that the Trump Administration is considering purchasing a stake in Intel seems to be a continuation of Trump's change in attitude toward the company and its CEO. In response to the Bloomberg report, Intel's stock surged 7% on Thursday. This is a developing story, and the White House has not yet commented.
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