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DealBook Newsletter

Billionaires, Biden and Chips

Eric Schmidt and Peter Thiel want taxpayers to help fund a revival of U.S. semiconductor manufacturing.

Good morning. Andrew and the rest of our team will be in Washington today for the DealBook DC policy forum. We will be speaking with the nation’s top leaders in the public and private sectors about America’s most urgent policy challenges, from regulating cryptocurrency to U.S. relations with China and Russia. Follow along on our live briefing, and hear from Janet Yellen, the U.S. Treasury secretary; Howard Schultz, chief executive of Starbucks; Senator Chris Murphy, Democrat of Connecticut; and more.

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A push to reinvigorate U.S. chip-making.Credit...Jonathan Ernst/Reuters

A group of billionaires has quietly assembled a push to get Washington to spend $1 billion on a new initiative to bring semiconductor chip manufacturing back to the U.S. Eric Schmidt, former C.E.O. of Google and longtime Democratic donor, and Peter Thiel, a co-founder of PayPal and vocal supporter of former President Donald Trump, are both backers of the idea. They and others recently started an unusual nonprofit venture capital fund, called America’s Frontier Fund, to invest in American chip-making, and want taxpayers to help foot the bill, DealBook’s Ephrat Livni reports.

Semiconductors are the subject of deep national security anxieties. They’re a foundational technology of modern life, not just in obviously digital devices but in everything from cars to military equipment. Over half the world’s chip-making capacity — and far more for the most advanced designs — is in Taiwan, which faces growing pressure from mainland China, itself an increasingly powerful player in the industry. As of 2020, according to a report by the Semiconductor Industry Association, the U.S. had 12 percent of global manufacturing capacity.

The new venture group has strong ties both in Washington and on Wall Street. It leads what the White House has described as “an independent consortium of investors” across the Quad, the China-countering security partnership between the U.S., Japan, India and Australia. The fund’s C.E.O., Gilman Louie, is a former video games executive turned venture capitalist who led In-Q-Tel, a C.I.A.-backed venture fund. He was recently named to President Biden’s Intelligence Advisory Board and is expected to testify before senators on strengthening supply chains.

The fund has raised more than a few eyebrows. Its backers have a lot of other potentially connected interests. Schmidt has been criticized for having too much influence in the Biden and Obama administrations; Thiel was thought to have Trump’s ear. “I’m not sure what that organization can accomplish that the U.S. government can’t accomplish itself,” said Gaurav Gupta, an emerging tech analyst at the industry research firm Gartner.

But the fund’s Louie said the skepticism wasn’t warranted: “If anything, we need more Eric Schmidts to get involved, not stand on the sidelines,” he said. “We need more technologists who have influence.”

At stake is U.S. primacy in the global innovation race. The risk of inaction, industry experts say, is that China’s recent tech investments will put Chinese technology, and perhaps even ideology, in first place. “In our current trajectory, the U.S. is losing its grip,” said Edlyn Levine, a quantum physicist and one of the fund’s founders. She added, “Whoever leads has a first mover advantage and actually will dominate in that sector the same way the United States did in early semiconductors.”

Is this the right group to help build up chip capacity? That’s a question being asked by the fund’s skeptics. The founders say they are committed, whether or not they get federal funding, and they have also started a related fund raising money from nonprofits. “I don’t need the government to give us permission to go save the country,” Louie said. “It’d be nice if they would help us.”


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The European Central Bank says it will raise interest rates for the first time in 11 years. The bank confirmed that it would stop growing its bond-buying program at the beginning of July. Policymakers have been spurred into action across the eurozone as inflation has outpaced economists’ expectations.

Wall Street criticizes the S.E.C.’s proposed changes to stock-trading rules. Brokerages and trading firms pushed back at plans from the regulator’s chairman, Gary Gensler. They said that the current system was working well and benefited individual investors by allowing for zero-commission trades.

Microsoft changes some workplace policies and practices. The software giant said it would stop enforcing noncompete clauses in the U.S., have its workplace policies audited next year and publish salary ranges in all of its U.S.-based job postings by January. It also recently promised to acknowledge the rights of its employees to unionize.

The PGA Tour will announce disciplinary measures against golf players who participate in a Saudi-funded league. The New York Post reported that the measures could include suspensions. The LIV tournament, whose biggest investor is the sovereign wealth fund of Saudi Arabia, has Phil Mickelson as one of its most prominent pros and a chief recruiter.

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Nearly a year into her job as chair of the Federal Trade Commission, Lina Khan’s record has lacked a signature action against the industry, and she hasn’t made the splash that many expected.

Khan was appointed by President Biden to shake up an agency that has long quivered at the power of the tech giants, but Republican lawmakers and the U.S. Chamber of Commerce have also fought her at every turn, describing her as anti-business and overbearing. At the F.T.C., staff morale has plummeted, according to a recent survey, and senior officials have left.

That may change now that she has a Democratic majority. Last month, Congress confirmed Alvaro Bedoya as the F.T.C.’s fifth commissioner, giving Democrats 3-2 control of the agency’s leadership. In a 20-minute interview this week with The Times’s Cecilia Kang over Zoom, she said she was preparing to unleash an aggressive agenda and “the best is yet to come.”

Focusing on dominant actors in markets is going to be a priority, she said. “You can expect to see big lawsuits,” she said. “We’re definitely focusing our resources on litigating. With limited resources, we’re having to focus on what we see as some of the biggest problems.”

Asked whether her work could really rein in tech, which often outpaces rule-making and policy, she said that a lot of the work the agency had done had “broadened the aperture” for understanding, recognizing and diagnosing harm. She said her aim was to anticipate problems down the line and take swift action.

“I think this goes back to being attentive to these next-generation technologies and next-generation innovations in nascent industries across sectors,” Khan said. “Those can really help us tackle problems at the inception.”

A key focus for Khan is reviewing merger guidelines. These are internal rules that the F.T.C. follows in its reviews of mergers alongside the Justice Department. Khan said these rules needed to be “fully adhering to existing law” while also accurately reflecting the ways companies “illegally acquire” power to fend off competition. “We’re going to continue enforcing the law vigorously, prohibiting illegal mergers, prohibiting unlawful business practices,” she said.


— Barrett Kime, a senior creative director at NBCUniversal, on how bosses lost leverage in their bids to bring workers back to offices.


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In the long, long road to U.S. citizenship, immigrants face hefty financial obstacles. All in, including green card, application for citizenship, legal fees and payments for processors, at least one estimate puts the cost of citizenship at as much as $11,000.

A new program, financed by BlueHub Capital, aims to address that cost. It offers a 1 percent interest loan to immigrants eligible to apply for citizenship. There are nine million immigrants eligible for citizenship in the U.S., BlueHub estimates, but the program has started small. Since it began in March, about 70 people have applied, according to Elyse Cherry, BlueHub’s C.E.O.

“We have built this to be a scalable model, so we expect it to work with thousands and thousands of borrowers,” Cherry told DealBook. “What we’re really trying to do here is to build out a community of immigrants and all of the folks from the country who support them.” The loan has no credit requirements or late or hidden fees.

Many immigrants already take out loans to cover costs associated with the citizenship process, but usually at very high fees. A survey conducted by a group affiliated with BlueHub of more than 1,200 people, found that 90 percent of immigrants borrowed to pay for citizenship. Two-thirds of borrowers said they drew on high-interest financing such as credit cards or payday lenders. A 2018 study by Stanford University researchers found that subsidies could make a significant difference. According to the study, low-income immigrants who received fee vouchers to assist with the application cost naturalized at double the rate of those who did not.

Compared with Canada, Australia and Britain, the percentage of immigrants to the U.S. who become citizens is low. And U.S. naturalization rates have declined markedly between 1970 and 2011, the Stanford study found. This matters because citizenship is associated with economic and social gains, both for individuals and for the places where they live. Gaining legal status generally leads to better job prospects, higher incomes and higher rates of homeownership, research has shown. And that’s on top of all the other rights and benefits of citizenship.

Luiz Sebastião Machado, a 72-year-old from Brazil who fixes vacuum cleaners and other equipment, said he was applying for citizenship using the 1 percent loan so he could have access to social security benefits once he retired.

Adina Appelbaum, a co-founder of financial planning firm Immigrant Finance, told DealBook that access to such a loan would make a significant difference to immigrant families. “One of the primary reasons that immigrants cannot apply for citizenship is the high fees,” she said.

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A correction was made on 
June 9, 2022

An earlier version of this newsletter misstated when Gilman Louie will appear at a congressional hearing about the supply chain. He is expected to testify at a hearing that has been rescheduled to June 15; he has not already testified.

How we handle corrections

Andrew Ross Sorkin is a columnist and the founder and editor at large of DealBook. He is a co-anchor of CNBC’s "Squawk Box" and the author of “Too Big to Fail.” He is also a co-creator of the Showtime drama series "Billions." More about Andrew Ross Sorkin

Vivian Giang joined The Times as a senior staff editor in 2019. Prior to The Times, she was a freelance writer and editor covering the workplace. More about Vivian Giang

Stephen Gandel is a news editor for DealBook. He was previously a senior reporter for CBS News, and a columnist at Bloomberg. He has covered Wall Street and financial firms for most of his career. More about Stephen Gandel

Lauren Hirsch joined the New York Times from CNBC in 2020, covering business, policy and mergers and acquisitions.  Ms. Hirsch studied comparative literature at Cornell University and has an M.B.A. from the Tuck School of Business at Dartmouth. More about Lauren Hirsch

Ephrat Livni reports from Washington on the intersection of business and policy for DealBook. Previously, she was a senior reporter at Quartz, covering law and politics, and has practiced law in the public and private sectors.   More about Ephrat Livni

Jenny Gross is a general assignment reporter. Before joining The Times, she covered British politics for the The Wall Street Journal. More about Jenny Gross

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