Joe Lonsdale, well known as both the cofounder of the data analytics company Palantir and the founding partner of the Austin-based venture capital firm 8VC, expressed significant unease on Thursday regarding the U.S. government’s multibillion-dollar investment into Intel. According to Lonsdale, the federal investment—amounting to approximately $8.9 billion—represents a deeply unconventional and troubling kind of intervention in private industry. Speaking in an interview on CNBC’s *Squawk Box*, he commented that the arrangement was strange from multiple perspectives: not only is it unusual for the government to assume an equity stake in a private enterprise, but providing a company with nearly $9 billion in direct financial support also appeared questionable. He went on to suggest that such intervention amounted to a manifestation of cronyism, a practice by which political or business elites confer advantages on their allies in ways that undermine merit-based competition.
By way of context, this funding is tied to the CHIPS and Science Act, a sweeping piece of legislation passed in 2022. The Act dedicates roughly $52 billion in subsidies, direct incentives, and tax breaks intended to stimulate a stronger U.S. semiconductor sector. Lawmakers designed the program to reduce reliance on foreign production and to boost domestic manufacturing capacity, particularly as access to advanced chips has become central not only to economic competitiveness but also to national defense and technological leadership. Intel, in particular, announced through a press release that the government’s equity stake would ultimately be financed using two specific allocations: $5.7 billion in grant money previously pledged under the CHIPS Act but not yet paid out, as well as $3.2 billion issued as part of the Secure Enclave program, itself an initiative aimed at fortifying semiconductor production within the United States.
What makes this development especially noteworthy is that it runs counter to the traditional behavior of the U.S. government in relation to private companies. Historically, Washington has tended to acquire stakes in private businesses only under circumstances of acute economic turbulence—such as during the 2008 global financial crisis, when federal intervention was deemed necessary to prevent systemic collapse. This Intel investment, by contrast, is occurring in the absence of a comparable emergency, raising questions about whether a new precedent may now be set that expands the government’s role as a shareholder in American corporate champions.
This shift in practice was further illuminated by recent comments from Kevin Hassett, the Director of the National Economic Council. Speaking with CNBC, Hassett argued that the Intel deal could be viewed as analogous to a sovereign wealth fund, something that many nations around the globe already maintain. Such funds typically invest in a variety of enterprises, channel surplus revenues into profitable ventures, and in some cases even return dividends or benefits directly to citizens. Hassett indicated that the Intel arrangement may be the beginning of a broader strategy, cautioning that additional investments could follow not only within the semiconductor industry but also in other key sectors of the economy.
Nevertheless, Lonsdale remains skeptical. He clarified that, in his view, such aggressive government involvement can only be justified if it produces an undeniable and substantial public benefit—particularly when it comes to matters of national security. If the objective were explicitly tied to protecting the country’s technological infrastructure or ensuring sovereignty in the supply of semiconductors critical for defense systems, aerospace technologies, and advanced computing, then he could understand and possibly support such measures. Otherwise, he suggested, there is no compelling rationale for federal authorities to blur the boundaries between the public and private spheres by distributing immense sums of money or taking significant equity positions in corporations. In his own words, if the justification truly lies in defending the nation’s security interests, then it would make sense for the government “not to take things” lightly, but rather to assume a firm role—otherwise, the move risks being seen as favoritism and unwarranted favoritism at that.
Sourse: https://www.businessinsider.com/palantir-cofounder-joe-lonsdale-us-intel-stake-cronyism-2025-9
