Rideback wrote: Tue Aug 26, 2025 6:16 am
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(2) To some extent "taking a passive stake" feels like it may be a rebranding of "bailout." There's a reason Intel is down 50% over five years--it lost the race to Nvidia. Intel's long-term success is hardly guaranteed, yet this story isn't being presented as a potential risk to US taxpayers.
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No. Just no.
What NVIDIA makes is not at all a drop-in replacement for what Intel makes. And I don't think a future where that would even make sense is likely. And I just don't see a situation where NVIDIA makes a chip that controls your microwave, watch, or the windshield wipers in your car. Ever.
You also need to keep in mind that a lot of this is largely accidental. It just happened that the same arithmetic operations that you need to put colored boxes on a video display were enormously useful for training and running neural networks as well. That lucky accident isn't certain to hold in the future. I think it reasonable to expect several orders of magnitude improvement (probably about a factor of a million total) is reasonably doable in terms of both power consumption and compute time versus current AI processing. Some of that will come from fancy hardware tricks, but a lot more will come from changes in the algorithms used to do training and inference.
NVIDIA hardware typically gives you performance boosts on the order of 1000x over Intel hardware if you are running neural networks. The thing is that there is no guarantee that some dudes at MIT won't come up with a different approach that completely neutralizes that speed advantage next week.
The overwhelming consensus in the AI research community is that the current LLM technology from companies like OpenAI and Anthropic, while very impressive, is likely a technological dead end. While there are a universe of practical applications for that tool, they are unlikely, by themselves, to be as world and economy changing as the hype fiends believe. Or enough to justify the inflated stock prices of OpenAI and Anthropic. Or NVIDIA for that matter.
CNBC interview Howard Lutnik states that Trump will try to partially nationalize defense corporations like Lockeed Martin.
From Scott Pilutik:
"The Trump Administration is suddenly taking big equity stakes in publicly traded complaints, and their defense against accusations that this is, well, socialism in no uncertain terms, is that the stakes are passive, non-voting shares, similar to the arrangement China has with its companies.
A few things:
(1) Well it sure isn't capitalism then either, is it? If these companies need outside capital it likely means they're failing. Direct US intervention undermines competition in the sectors we've decided to meddle and the free market suffers as a result.
(2) To some extent "taking a passive stake" feels like it may be a rebranding of "bailout." There's a reason Intel is down 50% over five years--it lost the race to Nvidia. Intel's long-term success is hardly guaranteed, yet this story isn't being presented as a potential risk to US taxpayers.
(3) For how long can anyone reasonably expect this US president to remain "passive"? Trump has bullied publicly traded companies on too many occasions to count, sending their prices reeling, enriching Trump insiders. If I'm Intel's competitor I'm a bit nervous right now.
(4) This isn't to say that the gamble can't or won't work in the limited sense that Intel and/or Lockheed's prices will go up. GM and Chrysler were bailed out by US taxpayers, successfully, because Obama weighed the collateral risks of letting the auto industry fail. That was also a risk but it was a transparent transaction, and there was a plan for the US to exit when the bailout stabilized. Which it did.
Here, there is no plan to exit, only a creeping sense that Trump will find more companies to "passively" impose himself upon, with our money."
"It's not communism, folks.
A lot of you are throwing around that word in reference to Trump extorting Intel to hand over 10% of its common stock to the US Government.
The correct term for this is: State Owned Enterprise, or SOE, specifically Government-as-Shareholder.
It is prohibited by most, not all, state constitutions, but is legal at the federal level in a vague sort of way.
SOE creates a whole raft of problems in our type of government/economic system, some obvious, most not.
The principle problem with SOE is that when the government owns stock in a corporation, the government assumes both the role of shareholder AND regulator of the business -- and therefor has a vested interest in manipulating the regulatory environment to favor its investment.
In this case, since the US government now owns interests in both Intel and NVIDIA...
What?
Oh, you didn't know about the NVIDIA deal?
Trump's government doesn't own stock in NVIDIA, but did make a deal where company pays the US government a 15% share of its revenue for products sold in China.
Specifically H2O chips, which are the GPU processors large AI arrays are based on. And since AI has been deemed a National Security issue, NVIDIA has to have Trump's personal permission to sell their chips to China. And in exchange for that permission, they pay Trump's government a percentage.
Call that whatever you like.
So, again, the US government now owns major financial interests in both Intel and NVIDIA.
But the US government is ALSO the regulatory body that governs that same industry, sets taxation on that industry, and controls international trade of that industry's product and its domestic sales.
The government regulates those companies' competitors.
AND Trump is now the legal arbiter of any industry disputes that should arise, like patent infringement, mergers, etc.
See the problem?
When government is both shareholder and regulator, it becomes nearly impossible to review decisions made by the Government-as-Shareholder for administrative law purposes. In fact, there is a whole body of law going back to the founding of the country dealing with this issue. It becomes nearly impossible to determine legal accountability, liability, for actions taken by both government and the corporation.
There is significant risk of government BECOMING a business and business becoming government.
There ARE certain economic conditions when Government Owned Enterprises are necessary/desirable under our form of government and economic system.
Those conditions are narrowly defined.
A recent example was when the US government became Government-as-Shareholder in General Motors during the 2009 Auto Industry Bailout as a result of the 2008 global financial crises. The US government assumed majority ownership of GM (61% of stock) to prevent wider economic collapse.
The US government was the ONLY entity with the capital to acquire the stock and prevent complete collapse of the company and likely cascading financial failure on both national and global scales.
Significantly, Government-as-Shareholder was not permanent. The Treasury Department had a mandatory exit strategy, and began selling off shares as soon as the company was deemed able to contribute to US economic growth without government involvement. That was completed by 2013.
The government did not make a profit from the bailout. It cost the US taxpayer $11 billion. But despite the financial loss, the bailout was considered a success in that it saved the US auto industry and literally MILLIONS of jobs and directly contributed to recovery from the 2008 financial crises. Since then, the successful bailout has paid US taxpayers back in federal taxes.
There are other times when Government-as-Shareholder is a valid methodology for capitalist societies like ours.
State Owned Enterprises are sometimes indicated when it is in our Strategic and National Security Interests to start up an industry that does not yet exist (see the Manhattan Project), or to provide an infusion of capital into a undeveloped regions, or to ensure the availability of essential goods and services, a crisis (like the GM example) and so on.
But in every case there must be strict division between government-as-shareholder and government-as-regulator.
There must an exit strategy, government-as-shareholder cannot be permanent and must be clearly defined limits on scope. Otherwise government becomes a business, and then a monopoly that controls the entire means of production for that industry INCLUDING the workforce (pay, benefits, conditions, safety, hours, hiring, etc) and THAT's the point where you can MAYBE start calling it a form of communism.
When government and business are the same, the government and business may benefit (or not) but the citizen and the worker most certainly will not. Labor is ALWAYS last in such a system. Always.
Understand a State Owned Enterprise is vastly different from a Government Sponsored Enterprise (GSE), which is a congressionally chartered but PRIVATELY owned corporation designed to stabilize and make available certain volatile portions of the economy. The most obvious examples of a GSE being the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Corporation (Freddie Mac). Another is the Federal Agricultural Mortgage Corporation (Farmer Mac). These are NOT Government-as-Shareholder enterprises and are an entirely different subject, which is also not communism.
Unlike previous examples of SOE, Trump isn't doing this to save jobs, or ensure goods and services to underserved communities or to provide capital to critical startups or to stabilize a crisis.
It's not to benefit American workers except by accident, in his own words, Trump is doing it for PROFIT.
What Trump is doing isn't communism.
It's a form of predatory Nationalized Capitalism without safeties or oversight and in the end it is likely to be a far worse form of oppression.
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(Disclaimer: This thread isn't intended as the definitive final word on this incredibly complicated subject, only as a starting point. Before jumping into the fray, you should consult actual economists, legal experts, and constitutional law)." Jim Wright
Can you IMAGINE the cries and sputters from the knuckle-draggers on the right…if Obama or Biden had taken a similar position in Ford, GM, Caterpillar or Boeing?
COMMUNISTS!
SOCIALISM AT IT’S WORST!
WE ARE DOOMED - CAPITALISM IS DEAD!!!!!!!
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David Bonn 
