Intel amended its deal with the U.S. Department of Commerce "to remove earlier project milestones," reports Reuters, "and received about $5.7 billion in cash sooner than planned." "The move will give Intel more flexibility over the funds."The amended agreement, which revises a November 2024 funding deal, retains some guardrails that prevent the chipmaker from using the funds for dividends and buybacks, doing certain control-changing deals and from expanding in certain countries. The move makes the Wall Street Journal wonder what, beyond equity, the U.S. now gets in return, calling government's position "a stake without a strategy."The U.S. has historically shied away from putting money into private business. It can't really outguess the market on where the most promising returns lie. Yet there are exceptions. Sometimes a company or industry risks failing without public support, and that failure would hurt the whole country, not just its shareholders and employees. Intel meets both conditions. It isn't failing, but it is losing money, its core business is in decline, and it lacks the capital and customers needed to make the most advanced semiconductors. If Intel were to fail, it would take a sizable chunk of the semiconductor industrial base with it. At a time of existential competition with China, that is a national emergency... [U.S. Commerce Secretary Howard Lutnick] said as a shareholder, the U.S. would help Intel "to create the most advanced chips in the world." And yet the deal doesn't provide Intel with new resources to accomplish that. Rather, to get the remaining $9 billion, Intel had to give the U.S. equity. This is more like a tax than an investment: Shareholders gave up a 10th of their ownership in return for money the company was supposed to get anyway... Some of the administration's forays into private business do reflect strategic thinking, such as the Pentagon's 15% stake in MP Materials in exchange for investment and contracts that help make the company a viable alternative to China as a supplier of rare-earth magnets for products such as automobiles, wind turbines, jet fighters and missile systems. But more often, companies recoil from government ownership... Though the U.S. stake dilutes Intel's existing shareholders, its stock has held up. There could be several reasons. It eliminates uncertainty over whether the remaining $9 billion in federal funds will be forthcoming... [B]ecause Washington has a vested interest in Intel's share price, investors believe it may prod companies such as Nvidia and Apple to buy more of its chips. But that only goes so far, the article seems to conclude, offering this quote from an analyst Bernstein investment research. "If Intel can prove they can make these leading-edge products in high volume that meets specifications at a good cost structure, they'll have customers lined up around the block. If they can't prove they can do it, what customer will put meaningful volume to them regardless of what pressure the U.S. government brings to bear?" CBS News also notes the U.S. government stake "is being criticized by conservatives and some economic policy experts alike, who worry such extensive government intervention undermines free enterprise." Thanks to Slashdot reader joshuark for sharing the news.Read more of this story at Slashdot.