Trump says U.S. government taking a 10% stake in tech giant Intel
President Trump announced that Intel has agreed to give the U.S. government a 10% stake in its business. This groundbreaking deal came after a meeting between Trump and Intel CEO Lip Bu Tan, following the president’s call for Tan’s resignation due to his past ties to China.
Trump stated, “I think it would be good having the United States as your partner,” to which Tan agreed, leading to the agreement.
Commerce Secretary Howard Lutnick confirmed the finalization of the deal in a social media post, emphasizing the significance of the U.S. government’s stake in Intel in strengthening U.S. leadership in semiconductors.
Intel, a struggling Silicon Valley chipmaker with a market cap of just over $100 billion, recently saw Japanese technology giant SoftBank Group acquire a 2% stake in the company. The Trump administration’s discussions with Intel for the 10% stake involved converting government grants pledged to Intel under the previous administration.
Intel officially confirmed the agreement in a news release, detailing that the U.S. government’s $8.9 billion investment in Intel common stock reflects confidence in the company’s ability to advance national priorities and expand the domestic semiconductor industry.
The government’s equity stake will be funded by previously awarded grants to Intel under the U.S. CHIPS and Science Act, as well as funds from the Secure Enclave program. The deal entails the government purchasing 433.3 million primary shares of Intel stock, representing a 9.9% stake in the company.
Trump took to Truth Social to announce that the U.S. now fully owns and controls 10% of Intel, with the shares valued at approximately $11 billion.
Why the Deal?
Trump’s interest in Intel stems from a strategic approach to boost chip production in the U.S. and reduce reliance on foreign manufacturers, particularly in light of the ongoing trade war with China. By securing a stake in Intel, the U.S. aims to maintain its technological edge in artificial intelligence.
Earlier this month, Trump’s demand for Tan’s resignation was rescinded after Tan reaffirmed his commitment to the U.S. in a public letter to Intel employees.
Intel, once a dominant force in the tech industry, faced challenges in the mobile computing era and the rise of artificial intelligence competitors like Nvidia and AMD. The company’s recent financial struggles prompted cost-cutting measures and layoffs.
Historical Precedent
While rare, the government’s investment in Intel echoes past instances like the bailout of General Motors during the Great Recession. Lutnick assured that the government’s non-voting shares in Intel won’t interfere with the company’s operations.
Analysts speculate on potential implications of the government’s financial ties to Intel on corporate partnerships and chip orders.
Intel’s Federal Grants
Intel received significant grants under the Biden administration’s CHIPS and Science Act, aimed at boosting domestic semiconductor production. The company, however, faced challenges in fulfilling construction projects tied to the program.
