In a previous op-ed, "America Needs a National Foundry, Not Another Intel Bailout," I argued there's a better approach than either administration's plan for building competitive semiconductor manufacturing. But Commerce Secretary Howard Lutnick's recent interview bashing the Biden approach as an "unbusinesslike giveaway" demands a direct comparison. What inspired this piece was Lutnick's criticism — which to me demonstrates so much of what's wrong with the current administration.
The Trump administration just converted $8.9 billion in Intel grants into a 9.9% equity stake, calling it a "great deal for America." But there's one question that cuts to the heart of whether this approach makes sense: What happens if Intel never delivers a competitive foundry?
Biden's Plan: Accountability Through Milestones
Under the original CHIPS Act structure negotiated by the Biden administration, Intel had to earn its funding through performance milestones. The government retained clawback provisions and profit-sharing mechanisms designed to protect taxpayers. If Intel failed to deliver on its foundry commitments, the government could recover funds or withhold future payments. And if the foundry succeeded, the government would share in the profits.
This wasn't just theory. When Intel missed certain early targets, the Biden administration actually reduced Intel's award from the initially proposed $8.5 billion to $7.86 billion. The system had teeth — and those teeth were sharpened by people who knew what they were doing.
And here's the key: Biden's plan had a stop-loss.
No milestone = no payment. If Intel failed early, the spigot turned off.
Serious underperformance = clawbacks. The government could recover portions of already disbursed funds.
No equity risk. Taxpayers weren't stuck holding passive shares in a company that might never deliver.
These accountability structures didn't materialize by accident. They came from career civil servants, policy experts, and technocrats with decades of experience managing large-scale government R&D programs. Milestone-based funding, clawbacks, and profit-sharing aren't experimental — they're standard tools refined over decades of federal contracting and industrial policy.
Trump's Plan: All Carrot, No Stick
The Trump administration took a radically different approach. According to Intel's own announcement, "the existing claw-back and profit-sharing provisions associated with the government's previously dispersed $2.2 billion grant to Intel under the CHIPS Act will be eliminated to create permanency of capital."
Translation: Intel keeps the money no matter what.
The only so-called penalty that remains is a warrant allowing the government to buy an extra 5% of Intel shares if the company "ceases to own at least 51% of the foundry business." But that clause only triggers if Intel spins off or sells the foundry — not if it fails to make it competitive.
It's the difference between two fundamentally different approaches:
Biden: "Let's structure this like sophisticated government contracting — staged funding, performance milestones, clawbacks, and taxpayer protections."
Trump/Lutnick: "I'm a businessman, I know how to make deals."
Biden's team recognized that public investment demands more accountability than private capital — not less. Trump and Commerce Secretary Howard Lutnick stripped away the guardrails, with Lutnick reportedly calling Biden's approach "not businesslike." The irony is stark: Biden's milestone-based structure actually resembles disciplined private equity investing, while Trump's approach offers a blank check with no performance requirements.
The irony runs even deeper. This isn't Trump making a tough businessman's deal for America — this is Trump giving Intel the same sweetheart terms he's always demanded for himself throughout his career: money upfront, no performance requirements, keep it all regardless of results. Intel gets the "Trump deal" while taxpayers get left holding the bag.
No competent investor would hand a struggling company $8.9 billion with no performance milestones, no board seats, and no way to get the money back if things go south. But Trump isn't thinking like an investor. He's thinking like someone who's spent decades on the receiving end of similar arrangements.
Classic Trump Logic
This Intel deal is classic Trump business logic — and it perfectly explains his track record across virtually every business venture.
Think Trump Steaks. Trump University. Trump Vodka. Trump Airlines. The USFL — where he bought the New Jersey Generals and then destroyed the entire league by forcing it to compete directly with the NFL. Even in real estate: multiple bankruptcies including Trump Taj Mahal, Trump Plaza, Trump Castle, and Trump Entertainment Resorts. Many of his golf courses are financial losers, not profit centers.
In his successful real estate deals, Trump could:
Slap his name on a building someone else operates
Declare bankruptcy and walk away while the underlying property retained value
Get paid upfront through licensing deals regardless of long-term performance
But foundries aren't real estate. Like airlines or consumer brands, they demand relentless operational focus, technical competence, and customer satisfaction. You can't brand your way to success in semiconductor manufacturing. You can't walk away when things get hard. And you can't expect someone else to execute while you pocket the cash.
This is why Trump's business record shows failure across multiple sectors. Whether it's consumer products, airlines, sports leagues, or even casino operations, sustained operational excellence is incompatible with his approach to "deal-making."
Lutnick comes from a similar background — bond trading and financial services — where you get paid upfront regardless of long-term outcomes, and if it goes really bad, the government bails you out. Neither Trump nor Lutnick has ever run a business where success depends on building a product that customers actually want, on time, at competitive prices.
The Intel deal is structured by people who think all business challenges are interchangeable.
The Witkoff Pattern
This faulty logic shows up across Trump appointments. Consider Steve Witkoff, the real estate developer Trump tapped to negotiate both the Russia-Ukraine war and Middle East conflicts. The same misplaced confidence driving foreign policy is baked into this semiconductor deal: success in one domain translates to expertise in completely unrelated ones. Whether it's semiconductor manufacturing or centuries-old geopolitical conflicts, Trump believes "business instincts" make you universally good at making deals and the right deals, even if you have no domain expertise.
No need to understand the geopolitical situation or how diplomacy works, just sit everyone down and make a deal.
The Critical Question
So what happens if Intel's foundry remains uncompetitive?
What if it keeps losing billions per year while Taiwan Semiconductor Manufacturing Company (TSMC) dominates the market?
What if American companies continue sending their most advanced designs overseas?
Under Biden's approach: The government could demand its money back or cut off future funding.
Under Trump's approach: Taxpayers are left holding 9.9% of a struggling business — with no board seats, no governance rights, and no leverage.
Why This Matters
Intel's foundry business lost $13 billion in 2024. The company has struggled to attract significant external customers and continues to lag far behind TSMC in both technology and market share. TSMC commands roughly 60% of the global foundry market, while Intel's foundry services remain essentially a startup within a legacy company. Quoting the company in one industry report:
"We have been unsuccessful to date in securing any significant external foundry customers for any of our nodes."
Yet Trump's plan removes the very accountability mechanisms designed to ensure taxpayer money produces results. It's socialism for Intel's shareholders — permanent capital with zero performance requirements.
From the interview I watched, Lutnick seems to believe this approach will somehow transform Intel into the next Nvidia, creating a trillion-dollar windfall for taxpayers. Nvidia is the antithesis of Intel. They must be selling some super pot where you live "Mr. Businessman," that is just too funny. Intel will deliver what you are talking about when I start dating Angelina Jolie.
Speaking of successful semiconductor turnarounds: AMD's Lisa Su didn't get handed a CEO role and billions in no-strings-attached funding. She joined AMD in 2012 as a senior VP when the company was struggling, worked her way up by delivering results, and earned the CEO position in 2014. Under her leadership, AMD went from $3 billion to over $200 billion in market cap. That's what actual operational excellence looks like - not getting paid upfront with no accountability.
The Bottom Line
Both approaches aim to rebuild American semiconductor manufacturing. But they differ fundamentally on one thing: accountability.
Biden's plan said: Deliver results or give us our money back.
Trump's plan says: Here's your money, and we'll take the investment risk with you.
Because if Intel keeps struggling — and their track record suggests this is the most likely outcome — the Biden plan offers recourse. The Trump/Lutnick plan leaves taxpayers holding shares in a floundering venture with no power to demand better performance.