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Intel Get $5.7 Billion Early. What's the Government's Strategy?

2 months 2 weeks ago
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.

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EditorDavid

Did Will Smith Upload an AI-Enhanced Video - and Is This Just the Beginning?

2 months 2 weeks ago
After Will Smith uploaded a video of an adoring crowd, blogger Andy Baio "conducted a detailed analysis that suggests Will Smith's team might have used AI to turn photos from his recent concerts into videos," writes BGR. But there's more to the story: Google recently ran an experiment for YouTube Shorts in which it used AI (machine learning) to improve the quality of Shorts without asking the creator for permission. People complained the videos looked like they were AI generated. It seems that Will Smith's YouTube Shorts clip that attracted criticism from fans this week might have been a victim of this experiment... The signs are real. The man who claimed Will Smith's song helped him cure cancer was there. The woman in front of him was holding the sign with him. The "Lov U" sign appeared in photos the singer posted on his social media channels before the clip was shared. "Will Smith has not denied the use of AI in these promotional clips," the article adds. But the Hollywood Reporter also calls it "just the beginning of AI chaos," noting that "influencers and spinmeisters have been using AI upscaling for years, if quietly, the way you might round up your current salary in a job interview." It's only going to grow more popular as the tools get better. (And they will — you just need some tweaks to the model and increases in compute to erase these hallucinations.) In fact, when the chapter on the early AI Age is written, the line about this moment is less likely to be, "Remember when Will Smith did something cringily AI?" and more, "Remember when AI was still seen as so cringe that we made fun of Will Smith for it?" Experts differ on the timeline, but everyone agrees it's just years if not months before we'll stop being able to spot an AI video. [Will Smith's video] had the particular misfortune of coming out at this interregnum moment: good enough for someone to use but not so good we can't spot it. That moment will be over soon enough, and, I suspect, so will our pearl-clutching. The main effect of this new age of the synthetic is that video will stop being a meaningful measure of truth. We have long stopped believing everything we read, and AI image-generators have killed what photoshop wounded. But video until now has been the last bastion of objectivity — incontrovertible evidence that an event took place the way it seemed to.... But there is an upside. (Really.) Without a format that can telegraph objectivity, we'll need to (if we care to) turn to other ways to assure ourselves of the facts: the source of the video. That could mean the human-led content creator will matter more. After years of seeing news brands take a beating in the trust department, they'll soon become the only hope we have of knowing whether something happened. We no longer will be able to trust the medium. But we may newly believe the media.

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EditorDavid