Money Rehab with Nicole Lapin - Wall Street News Roundup: The Government's 15% Cut From Nvidia, Intel's Bad Year and Trouble at Yieldstreet

Episode Date: August 20, 2025

Today, Nicole shares the biggest headlines on Wall Street and how they will affect you and your wallet. In this episode, she unpacks why the U.S. government will now get a cut from Nvidia (and what the Constitution has to say about it), what Intel's very bad year means for investors, and lessons from trouble at Yieldstreet. This podcast is for informational purposes only and does not constitute financial, investment, or legal advice. Always do your own research and consult a licensed financial advisor before making any financial decisions or investments. All investing involves the risk of loss, including loss of principal. Brokerage services for US-listed, registered securities, options and bonds in a self-directed account are offered by Public Investing, Inc., member FINRA & SIPC. Public Investing offers a High-Yield Cash Account where funds from this account are automatically deposited into partner banks where they earn interest and are eligible for FDIC insurance; Public Investing is not a bank. Cryptocurrency trading services are offered by Bakkt Crypto Solutions, LLC (NMLS ID 1890144), which is licensed to engage in virtual currency business activity by the NYSDFS. Cryptocurrency is highly speculative, involves a high degree of risk, and has the potential for loss of the entire amount of an investment. Cryptocurrency holdings are not protected by the FDIC or SIPC.  *APY as of 6/30/25, offered by Public Investing, member FINRA/SIPC. Rate subject to change. See terms of IRA Match Program here: public.com/disclosures/ira-match.

I'm Nicole Lapin, the only financial expert you don't need a dictionary to understand. It's time for some money rehab. It is time for a roundup of the biggest stories on Wall Street and how they're going to affect you and your wallet. As you know, I have been a financial reporter for 10,000 years now. I started my career when I was 18 on the floor of the Chicago Merck, so I am used to having to go through dead. dense documents. This week, NVIDIA has me brushing up, not on earnings reports, but on the Constitution. Specifically, Article 1, Section 9, Clause 5. If you need a refresher yourself on that one, it reads, no tax or duty shall be laid on articles exported from any state. Now, the TLDR is that this is known as the Export Clause, and it's way more straightforward than it sounds. If you have a domestically designed or produced product and you sell it internationally, the United States government cannot tax it. It is so straightforward, in fact, that the only legal cases about it

have to do with really hyper-specific products like maritime insurance premiums. I know. Very exciting stuff here. So why the heck is this long-settled clause suddenly back in the headlines? And what does it have to do with Nvidia and AMD? Both companies, manufacturers, semiconductors, including the highly sophisticated chips that power artificial intelligence. NVIDIA is NVIDIA. AMD or Advanced MicroDevices is a player that has also seen a serious lift from the AI boom. AMD stock is up 99% over the last five years, which is seriously impressive, although not quite as impressive as NVIDIA, which is up 1,300% over the last five years.

But again, NVIDIA is NVIDIA. The chips Nvidia and AMD make power everything from TikTok filters to potential weapon systems. Think of these chips like the electricity of the digital age. In 2022, the Biden administration banned American companies from exporting a specific type of semiconductor called advanced graphic processing units or GPUs to China and Russia without specific authorization. The rationale behind this was letting those companies supercharge their AI could create massive security risk. surveillance, weapon systems, you name it. Now, there weren't taxes involved, just restrictions. U.S. firms could only sell watered-down versions of their chips that passed regulatory muster. Still, that was a gut punch to the bottom line. Invita alone had reported $400 million in sales in China

the quarter before the rule kicked in. Both Nvidia and AMD went back to the drawing board, designing chips that complied with the law, but still had a market in China. Then, In April of this year, the Trump administration slammed the brakes and blocked even those sales. InVIDIA was left with $5.5 billion worth of chips just gathering dust in storage because of that. Since then, both companies have been lobbying hard for licenses to get back into China, and relief has finally come through a very un-DC way. Instead of legislation, Nvidia and AMD struck a deal. In exchange for licenses, they'll give the U.S. government 15.

percent of revenue from advanced chip sales in China. Analysts estimate that those licenses could be worth around $2 billion. For context here, the U.S. government spends about $18 billion a day, but Washington is very, very hyped on chipping away at the national debt. So every billion helps. Anyway, there is a constitutional wrinkle here. Is this 15% a tax or a duty? If so, it's unconstitutional under the export clause because you can't tax domestic products sold overseas. And I know what you're thinking here, but no, even if NVIDIA makes the chips overseas, U.S. export rules still apply because the technology was designed in America. So if it's not a tax, what is it exactly? A fee, a royalty, a political IOU?

Normally the courts would hash this out, but NVIDIA and AMD aren't about to sue. They finally got their golden ticket back into China. they are not risking it. Still, it raises big questions. If it was a security concern before, why is it suddenly fine once money is involved? And how do you even enforce this? Chip smuggling is already a thriving global business. I am all in, by the way, for introducing ways for the U.S. government to make more money, but I am not sold on this plan. InVIDIA represents more than 7% of the entire S&P 500 index, which means that it carries a lot of weight within the U.S. stock market as a whole. It's not just a big deal for the markets, though. It's a big deal for

our economy. As a share of US GDP, Nvidia's $4 trillion valuation represents roughly 13%. So if China can outpace Nvidia's competitive edge, the stock price will fall. And that will be problematic for U.S. investors. So let's keep a close eye on this one. While we're on the subject of chips, though, let's talk about my next big story on the street. Intel. Poor, poor Intel. Intel is not doing so great. On one hand, SoftBank just announced a $2 billion investment in Intel, and the stock rose 6% on the news. Yay! But unlike its chip-making counterparts, Intel has really been struggling to break into the high-end AI race. Shares lost 60% of their value last year. Recently, Intel's CEO Lip Bhutan said it's, quote, too late to catch up in the AI race, and he doesn't consider Intel to be one of the top 10 semiconductor firms.

Ouch. That's your own company, bro. Anyway, as a result, President Trump publicly slammed Tan on truth social, calling him highly conflicted and demanding that he resign, pointing to Tan's heavy investments in China, some tied to military projects. The company panicked and arranged a face-to-face meeting with the president shortly after we learned that the administration might convert existing grants to Intel into $10 billion worth of equity shares, which comes out to about 10% of the company. These grants came from the Chips and Science Act, a big spending bill designed to bring more semiconductor manufacturing back to the U.S., which passed in 2022 under Biden. This act sprung from the U.S.'s concern about relying too heavily on Asia. especially Taiwan and South Korea for advanced chips. In the Chips Act, the government set aside $39 billion in grants for chipmakers. These were not loans and the government did not expect to get paid back. Instead, they were subsidies meant to cover the huge upfront cost of building factories in America.

Big players like Intel, TSM, Samsung, Micron, Nvidia, and Global Foundries all got a slice. Intel was the single largest recipient, though, about $10.9 billion. total, $7.9 billion for U.S. plants and $3 billion for defense-related manufacturing. The Biden administration originally structured this as free money, aka grants. The Trump administration, through Commerce Secretary Howard Lutnik, is now saying if taxpayers are footing the bill, taxpayers should get something back. So instead of Intel just pocketing $10.9 billion as a subsidy, the government may require Intel to give Washington stock in the company. That makes the government a shareholder entitled to dividends, gains if the stock price rises, and potentially voting rights

depending on the share type, although so far Trump officials are saying that they wouldn't have voting rights. This would impact investors because it almost certainly would dilute existing shareholders. Here's what I mean. If Intel has to give Washington $10 billion worth of stock, it would need to create and then hand over the shares to the government unless it buys back shares from the market, which is less likely. It won't mean that investors will get stock taken away from them, but it would mean that their stock would become slightly less valuable. Here's the simplest way to think about this concept. Say you and I start a company together and our company issues just two shares. We each get one and therefore we own 50% of the company, right? If we hire a third co-founder

and issue a new share for them, you and I both still have one share, but now we only have 33% of the company because now the total shares outstanding have gone from two to three. This is why adding shares to Intel would dilute ownership for existing shareholders. But instead of my made-up example where there are only three shares, Intel has about 4.3 billion shares outstanding. But even so, when you look at Intel's numbers, that's an expected drop of about 7%. Some investors might like the government backstop. Others worry about political ownership creeping into private companies. I will say it's not a good look, though, when your competitors, aka Nvidia, are offering the government a slice of their profits because the pie is just so, so large, and all you can do is put some ownership of your struggling company on the table. Finally, let's check in with Yield Street, a company that conceptually was very cool.

Yield Street's big pitch was democratizing access to asset classes once reserved for the ultra-rich, like real estate, art, private equity. Sounds like a great idea, right? Unfortunately, the execution has not been ideal. According to CNBC, investors put over $370 million into 30 different real estate deals. Of those, four have already gone bust, and 23 more are teetering on a watch list. Over the past year alone, investors recognize $78 million in defaults. Yield Street has also shut down its real estate investment trust and returns in that sector have cratered from 9.4% annually in 2023 to just 2% today. The company blames interest rates and adverse market reactions,

and there is some truth to that. Also, I have to call it like it is. One big reason these asset classes are associated with rich people is because rich people can afford to lose money. These asset classes are risky. Four out of 30 real estate deals going belly up is not unheard of. And that's what Yield Street should have made abundantly. clear. But they haven't. The company has also not been up front about the losses. They've sent out fewer updates to current investors while simultaneously hitting them up for new funding rounds. Some documents even downplayed how bad things really were. And that's the heartbreak here. Alternative investing is always risky, but when trust erodes, it stings twice as much.

For now, Yield Street Saga is a reminder that exactly. Exotic investments can come with exotic risks. And when it comes to your money, transparency isn't optional. It's everything. For today's tip, you can take straight to the bank. If you're exploring alternative investments like private equity, real estate syndications, or art funds, ask for the fund's capital call schedule before you invest. This tells you when and how often the fund might ask for additional money. Yield Streets investors got burned not just by losses, but by surprise capital calls and radio silence. If a firm can't or won't share a timeline or contingency plan for additional contributions, walk away. The ultra-wealthy protect their money by asking

better questions on the front end, and you should too. Money Rehab is a production of Money News Network. I'm your host, Nicole Lapin. Money Rehab's executive producer is Morgan Levoy. Our researcher is Emily Holmes. Do you need some money rehab? And let's be honest, we all do. So email us your money questions, money rehab at money newsnetwork.com to potentially have your questions answered on the show or even have a one-on-one intervention with me. And follow us on Instagram at Money News and TikTok at Money News Network for exclusive video content. And lastly, thank you. No, seriously, thank you. Thank you for listening and for investing in yourself, which is the most important investment you can make.

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