Comment by hellojesus

Investments can be bad. The market efficiently destroys malallocated capital through competition.

The problem with government taking stakes in private companies is that it creates moral hazard. By taking ownership in Intel, the government has effectively "propped it up". This means that Intel competitors that made less risky decisions to remain solvent are now losing; their bet was Intel was operating poorly, and instead of capitalizing on Intel's downfall so they can fill the gap, the government has plugged the gap. This action distorts markets away from their competitive equilibrium. In the process it generates moral hazard and deadweight loss.

Investments by the government can make sense, but generally it makes the most sense when investments support public goods (arguably also when supporting goods/services that the private market would not). Cpus are neither.

Just like the SVB bailout, or Freddie/Fannie/Sallie establisments, this is bad.