A logo of the Taiwan Semiconductor Manufacturing Company (TSMC) displayed on a smartphone screen
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The Trump administration is pushing Taipei to shift investment and chip production to the U.S. so that half of America’s chips are manufactured domestically, in a move that could have implications for Taiwan’s national defense.
Washington has held discussions with Taipei about the “50-50” split in semiconductor production, which would significantly reduce American dependence on Taiwan, U.S. Secretary of Commerce Howard Lutnick told News Nation in an interview released over the weekend.
Taiwan is said to produce over 90% of the world’s advanced semiconductors, which, according to Lutnick, is cause for concern due to the island nation’s distance from the U.S. and proximity to China.
“My objective, and this administration’s objective, is to get chip manufacturing significantly onshored — we need to make our own chips,” Lutnick said. “The idea that I pitched [Taiwan] was, let’s get to 50-50. We’re producing half, and you’re producing half.”
Lutnick’s goal is to reach about 40% domestic semiconductor production by the end of U.S. President Donald Trump’s current term, which would take northwards of $500 billion in local investments, he said.
Taiwan’s stronghold on chip production is thanks to Taiwan Semiconductor Manufacturing Co., the world’s largest and most advanced contract chipmaker, which handles production for American tech heavyweights like Nvidia and Apple.
Taiwan’s critical position in global chips production is believed to have assured the island nation’s defense against direct military action from China, often referred to as the “Silicon Shield” theory.
However, in his News Nation interview, Lutnick downplayed the “Silicon Shield,” and argued that Taiwan would be safer with more balanced chip production between the U.S. and Taiwan.
“My argument to them was, well, if you have 95% [chip production], how am I going to get it to protect you? You’re going to put it on a plane? You’re going to put it on a boat?” Lutnick said.
Under the 50-50 plan, the U.S. would still be “fundamentally reliant” on Taiwan, but would have the capacity to “do what we need to do, if we need to do it,” he added.
Beijing views the democratically governed island of Taiwan as its own territory and has vowed to reclaim it by force if necessary. Taipei’s current ruling party has rejected and pushed back against such claims.
This year, the Chinese military has held a number of large-scale exercises off the coast of Taiwan as it tests its military capabilities. During one of China’s military drills in April, Washington reaffirmed its commitment to supporting Taiwan.
More in return for defense
Lutnick’s statements on the News Nation interview aligned with past comments from Trump, suggesting that the U.S. should get more in return for its defense of the island nation against China.
Last year, then-presidential candidate Trump had said in an interview that Taiwan should pay the U.S. for defense, and accused the country of “stealing” the United States’ chip business.
The U.S. was once a leader in the global semiconductor market, but has lost market share due to industry shifts and the emergence of Asian juggernauts like TSMC and Samsung.
However, Washington has been working to reverse that trend across multiple administrations.
TSMC has been building manufacturing facilities in the U.S. since 2020 and has continued to ramp up its investments in the country. It announced intentions to invest an additional $100 billion in March, bringing its total planned investment to $165 billion.
The Trump administration recently proposed 100% tariffs on semiconductors, but said that companies investing in the U.S. would be exempt. The U.S. and Taiwan also remain in trade negotiations that are likely to impact tariff rates for Taiwanese businesses.
U.S. President Donald Trump reacts, as he arrives at Joint Base Andrews, Maryland, U.S., September 26, 2025.
Elizabeth Frantz | Reuters
YouTube has agreed to pay $24.5 million to settle a lawsuit involving the suspension of President Donald Trump’s account following the U.S. Capitol riots on Jan. 6, 2021.
The settlement “shall not constitute an admission of liability or fault,” on behalf of the defendants or related parties, according to a filing on Monday from the U.S. District Court for the Northern District of California.
Trump sued YouTube, Facebook and Twitter in mid-2021, after the companies suspended his accounts on their platforms over concerns related to the incitement of violence.
Since Trump won a second term in November and returned to the White House in January, the tech companies have been settling their disputes with the president. Facebook-parent Meta said in January that it would pay $25 million to settle its lawsuit with Trump. The following month, Elon Musk’s X, formerly Twitter, agreed to settle its Trump-related case for roughly $10 million.
In August, several Democratic senators, including Elizabeth Warren of Massachusetts, sent a letter to Google CEO Sundar Pichai and YouTube CEO Neal Mohan expressing their concern over a possible settlement with the president.
The senators said in the letter that they worried such an action would be part of a “quid-pro-quo arrangement to avoid full accountability for violating federal competition, consumer protection, and labor laws, circumstances that could result in the company running afoul of federal bribery laws.”
Electronic Arts said Monday that it has agreed to be acquired by the Public Investment Fund of Saudi Arabia, Silver Lake and Affinity Partners in an all-cash deal worth $55 billion.
Shareholders of the company will receive $210 per share in cash.
EA stock climbed 5% Monday. Shares gained about 15% Friday, closing at $193.35, after the Wall Street Journal reported that the company was nearing a deal to go private.
PIF is rolling over its existing 9.9% stake in the company and will, by far, be the majority investor in the new structure, people close to the deal told CNBC’s David Faber.
Affinity CEO Jared Kushner, who is President Donald Trump‘s son-in-law, touted EA’s “bold vision for the future” in a release announcing the deal.
“I’ve admired their ability to create iconic, lasting experiences, and as someone who grew up playing their games - and now enjoys them with his kids – I couldn’t be more excited about what’s ahead,” Kushner said in a statement.
The group of companies is making a total $36 billion equity investment, with $20 billion in debt financing from JPMorgan, according to the release. JPMorgan was brought in a couple of weeks ago, people familiar with the deal told Faber.
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The take-private deal for the maker of popular games like Battlefield, The Sims and the Madden series of NFL games, among others, is set to be the largest leveraged buyout in Wall Street history.
In a note to employees, EA CEO Andrew Wilson said he is “excited to continue as CEO.”
“Our new partners bring deep experience across sports, gaming, and entertainment,’ he wrote. “They are committed with conviction to EA – they believe in our people, our leadership, and the long-term vision we are now building together.”
The deal is expected to close in the first quarter of fiscal year 2027.
There is a 45-day window to allow for other proposals, people familiar with the terms of the deal told Faber. The deal talks started in the spring, the people said.
Silver Lake, which is led by co-CEOs Egon Durban and Greg Mondre, is also one of the key investors in Trump’s push to get TikTok under U.S. control.
CNBC has reached out to EA for further comment and information on the deal.
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The Nasdaq and S&P 500 rose to record highs this week after Nvidia agreed to invest up to $100 billion in OpenAI. That followed a $300 billion deal between OpenAI and Oracle in July as part of the the Stargate program, a $500 billion infrastructure project that’s also being funded by SoftBank.
Its commitments don’t stop there. CoreWeave on Thursday said it’s agreed to provide OpenAI up to $22.4 billion in AI infrastructure, an increase from the $11.9 billion it initially announced in March. Earlier this month, chipmaker Broadcom said it had secured a new $10 billion customer, and analysts were quick to point to OpenAI.
While OpenAI says that scaling is key to driving innovation and future AI breakthroughs, investors and analysts are beginning to raise their eyebrows over the mindboggling sums, as well as OpenAI’s reliance on an increasingly interconnected web of infrastructure partners.
OpenAI took a $350 million stake in CoreWeave ahead of its IPO in March, for instance. Nvidia formalized its financial stake in OpenAI by participating in a $6.6 billion funding round in October. Oracle is spending about $40 billion on Nvidia chips to power one of OpenAI’s Stargate data centers, according to a May report from the Financial Times. Earlier this month, CoreWeave disclosed an order worth at least $6.3 billion from Nvidia.
And through its $100 billion investment in OpenAI, Nvidia will get equity in the startup and earn revenue at the same time.
OpenAI is only expected to generate $13 billion in revenue this year, according to the company’s CFO Sarah Friar. She told CNBC that technology booms require bold bets on infrastructure.
“When the internet was getting started, people kept feeling like, ‘Oh, we’re over-building, there’s too much,'” Friar said. “Look where we are today, right?”
Altman told CNBC in August that he’s willing to run the company at a loss in order to prioritize growth and its investments.
‘Troubling signal’
But some analysts are raising red flags, arguing that OpenAI’s deal with Nvidia is reminiscent of vendor financing patterns that helped burst the dot-com bubble in the early 2000s.
Nvidia has been the biggest winner of the AI boom so far because it produces the graphics processing units (GPUs) that are necessary to train models and run large AI workloads. Nvidia’s investment in OpenAI, which will be paid out in installments over several years, will help the startup build out data centers that are based around its GPUs.
“You don’t have to be a skeptic about AI technology’s promise in general to see this announcement as a troubling signal about how self-referential the entire space has become,” Bespoke Investment Group wrote in a note to clients on Tuesday. “If NVDA has to provide the capital that becomes its revenues in order to maintain growth, the whole ecosystem may be unsustainable.”
Sam Altman, CEO of OpenAI (L), and Jensen Huang CEO of Nvidia.
Reuters
Peter Boockvar, chief investment officer at One Point BFG Wealth Partners, said names of companies from the late 1990′s were ringing in his ears after the OpenAI-Nvidia deal was announced.
A key difference, however, is that this transaction is “so much bigger in terms of dollars,” he wrote in a note.
“For this whole massive experiment to work without causing large losses, OpenAI and its peers now have got to generate huge revenues and profits to pay for all the obligations they are signing up for and at the same time provide a return to its investors,” Boockvar said.
An OpenAI spokesperson referred CNBC to comments from Altman and Friar this week, adding that the company is pursuing “a once-in-a-century opportunity that demands ambition equal to the moment.”
The total amount of demand for compute could reach a staggering 200 gigawatts by 2030, according to Bain & Company’s 2025 Technology Report. Building enough data centers to meet this anticipated demand would cost about $500 billion a year, meaning AI companies would have to generate a combined $2 trillion in annual revenue to cover those costs.
Even if companies throw their whole weight behind investing in the cloud and data centers, “the amount would still fall $800 billion short of the revenue needed to fund the full investment,” Bain said.
There’s a clear uphill battle ahead, but OpenAI’s Altman brushed off concerns on Tuesday, rejecting the idea that the infrastructure spending spree is overkill.
“This is what it takes to deliver AI,” Altman told CNBC. “Unlike previous technological revolutions or previous versions of the internet, there’s so much infrastructure that’s required, and this is a small sample of it.”
–CNBC’s Yun Li and MacKenzie Sigalos contributed to this report