Intel CEO Patrick Gelsinger speaks prior to President Joe Biden’s remarks at Intel Ocotillo Campus on March 20, 2024 in Chandler, Arizona.
Rebecca Noble | Getty Images
Chipmaker Intel and the CHIPS Act Office are close to finalizing a deal which would award the company a roughly $8 billion grant, according to a person familiar with the matter, as the Biden administration moves to dole out funds before President-elect Trump’s inauguration.
That $8 billion will go towards Intel’s factory-building efforts, said the person. The Commerce Department is expected to finalize the awards in the coming weeks, the person said.
Intel is also in line for a $3 billion contract to manufacture chips for the Department of Defense, a deal announced in September and a rare bright spot in the company’s struggling efforts to grow its fab business. The Commerce Department and Intel declined to comment on the matter.
The Wall Street Journal first reported that the two sides were close to finalizing the grant.
But Intel’s struggles have intensified since the grant was initially announced. The New York Times, citing four people familiar with the matter, reported Sunday that the government had decided to decrease the grant by roughly $500 million due to uncertainties about Intel’s ability to execute on its investment commitment, and because of Intel’s shifting technology roadmap and customer demand.
The U.S. awarded Taiwan Semiconductor Manufacturing Company a $6.6 billion grant earlier this month, raising investor expectations that cash funding for Intel would come soon. Intel has benefited from CHIPS Act tax breaks but has not yet received cash awards, something which Intel CEO Pat Gelsinger has expressed dissatisfaction with.
“We’re frustrated that hasn’t moved faster,” Gelsinger told CNBC in October, referring to the CHIPS Act grants. “They’ve been too bureaucratic in that process. We’re anxious to see those finished.”
U.S. House Speaker Mike Johnson had previously said he might look to repeal the bipartisan CHIPS Act, but he then walked back those comments. The Biden administration and grant awardees have touted the legislation as a job-creating machine.
Intel’s struggles have increased significantly this year. The company posted a nearly $17 billion loss last quarter and has been dialing back CEO Pat Gelsinger’s ambitious plans worldwide.
Intel announced earlier this year it would trim back 15,000 jobs via layoffs and voluntary buyouts. It has made moves to make its foundry business more easily separable from its legacy business, and has been working with advisors on activist defense and a broader strategic review, people familiar with the matter previously said. Intel is also seeking to raise cash via a minority stake in the Altera business, CNBC previously reported, and has been sounding out interested acquirers for weeks.
It may also be staring down a once-unthinkable prospect: a potential takeover bid from an ascending Qualcomm, which has a market cap that now dwarfs Intel’s.
Altimeter Capital CEO Brad Gerstner said Thursday that he’s moving out of the “bomb shelter” with Nvidia and into a position of safety, expecting that the chipmaker is positioned to withstand President Donald Trump’s widespread tariffs.
“The growth and the demand for GPUs is off the charts,” he told CNBC’s “Fast Money Halftime Report,” referring to Nvidia’s graphics processing units that are powering the artificial intelligence boom. He said investors just need to listen to commentary from OpenAI, Google and Elon Musk.
President Trump announced an expansive and aggressive “reciprocal tariff” policy in a ceremony at the White House on Wednesday. The plan established a 10% baseline tariff, though many countries like China, Vietnam and Taiwan are subject to steeper rates. The announcement sent stocks tumbling on Thursday, with the tech-heavy Nasdaq down more than 5%, headed for its worst day since 2022.
The big reason Nvidia may be better positioned to withstand Trump’s tariff hikes is because semiconductors are on the list of exceptions, which Gerstner called a “wise exception” due to the importance of AI.
Nvidia’s business has exploded since the release of OpenAI’s ChatGPT in 2022, and annual revenue has more than doubled in each of the past two fiscal years. After a massive rally, Nvidia’s stock price has dropped by more than 20% this year and was down almost 7% on Thursday.
Gerstner is concerned about the potential of a recession due to the tariffs, but is relatively bullish on Nvidia, and said the “negative impact from tariffs will be much less than in other areas.”
He said it’s key for the U.S. to stay competitive in AI. And while the company’s chips are designed domestically, they’re manufactured in Taiwan “because they can’t be fabricated in the U.S.” Higher tariffs would punish companies like Meta and Microsoft, he said.
“We’re in a global race in AI,” Gerstner said. “We can’t hamper our ability to win that race.”
YouTube on Thursday announced new video creation tools for Shorts, its short-form video feed that competes against TikTok.
The features come at a time when TikTok, which is owned by Chinese company ByteDance, is at risk of an effective ban in the U.S. if it’s not sold to an American owner by April 5.
Among the new tools is an updated video editor that allows creators to make precise adjustments and edits, a feature that automatically syncs video cuts to the beat of a song and AI stickers.
The creator tools will become available later this spring, said YouTube, which is owned by Google.
Along with the new features, YouTube last week said it was changing the way view counts are tabulated on Shorts. Under the new guidelines, Shorts views will count the number of times the video is played or replayed with no minimum watch time requirement.
Previously, views were only counted if a video was played for a certain number of seconds. This new tabulation method is similar to how views are counted on TikTok and Meta’s Reels, and will likely inflate view counts.
“We got this feedback from creators that this is what they wanted. It’s a way for them to better understand when their Shorts have been seen,” YouTube Chief Product Officer Johanna Voolich said in a YouTube video. “It’s useful for creators who post across multiple platforms.”
CEO of Meta and Facebook Mark Zuckerberg, Lauren Sanchez, Amazon founder Jeff Bezos, Google CEO Sundar Pichai, and Tesla and SpaceX CEO Elon Musk attend the inauguration ceremony before Donald Trump is sworn in as the 47th U.S. president in the U.S. Capitol Rotunda in Washington, Jan. 20, 2025.
Saul Loeb | Via Reuters
Technology stocks plummeted Thursday after President Donald Trump’s new tariff policies sparked widespread market panic.
Apple led the declines among the so-called “Magnificent Seven” group, dropping nearly 9%. The iPhone maker makes its devices in China and other Asian countries. The stock is on pace for its steepest drop since 2020.
Other megacaps also felt the pressure. Meta Platforms and Amazon fell more than 7% each, while Nvidia and Tesla slumped more than 5%. Nvidia builds its new chips in Taiwan and relies on Mexico for assembling its artificial intelligence systems. Microsoft and Alphabet both fell about 2%.
The drop in technology stocks came amid a broader market selloff spurred by fears of a global trade war after Trump unveiled a blanket 10% tariff on all imported goods and a range of higher duties targeting specific countries after the bell Wednesday. He said the new tariffs would be a “declaration of economic independence” for the U.S.
Companies and countries worldwide have already begun responding to the wide-sweeping policy, which included a 34% tariff on China stacked on a previous 20% tax, a 46% duty on Vietnam and a 20% levy on imports from the European Union.
China’s Ministry of Commerce urged the U.S. to “immediately cancel” the unilateral tariff measures and said it would take “resolute counter-measures.”
The tariffs come on the heels of a rough quarter for the tech-heavy Nasdaq and the worst period for the index since 2022. Stocks across the board have come under pressure over concerns of a weakening U.S. economy. The Nasdaq Composite dropped nearly 5% on Thursday, bringing its year-to-date loss to 13%.
Trump applauded some megacap technology companies for investing money into the U.S. during his speech, calling attention to Apple’s plan to spend $500 billion over the next four years.