WASHINGTON, Aug 23: President Donald Trump announced on Friday that the United States will acquire a 10 per cent stake in Intel Corp, marking another extraordinary intervention by his administration in corporate America.
A formal announcement is expected later in the day, according to a source familiar with the matter. Trump is scheduled to meet Intel’s chief executive, Lip-Bu Tan, at the White House.
The arrangement follows a tense meeting earlier this month, where Trump had demanded Tan’s resignation over his company’s links to Chinese firms. “He walked in wanting to keep his job, and he ended up giving us $10 billion for the United States,” Trump said.
Commerce Secretary Howard Lutnick confirmed the deal on X, declaring that “the United States of America now owns 10 per cent of Intel,” describing the agreement as fair to both the company and the American people.
The equity stake, valued at roughly $10 billion, mirrors the amount Intel is slated to receive in government grants under the CHIPS Act to support its US semiconductor manufacturing projects.
Part of a Wider Intervention Strategy
The Intel move adds to a string of unconventional government interventions. Earlier this year, Nvidia agreed to allow the US government a 15 per cent cut of sales from its H20 chips to China. The Pentagon is also set to become the largest shareholder in a rare earth mining firm, while Washington secured a “golden share” with veto rights in Nippon Steel’s acquisition of US Steel.
Critics warn that Trump’s approach is reshaping corporate risk, with the government inserting itself directly into business strategy and ownership.
Officials previously disclosed that the administration sought to convert $7.9 billion in grants initially approved under President Joe Biden’s term into an equity stake in Intel. However, the White House clarified it has no plans to demand equity from other chipmakers like TSMC or Micron, which are expanding their US operations.
Intel’s Struggles and Industry Pressure
Intel has been under pressure to regain competitiveness in semiconductor manufacturing. Synovus Trust Senior Portfolio Manager Daniel Morgan noted that while federal backing offers breathing room, Intel still faces fundamental challenges.
“Intel needs to catch up with TSMC technologically to win new business,” Morgan said, adding that its foundry unit will require more than government support to secure sufficient capital.
A 10 per cent non-voting stake means Washington will not be able to influence Intel’s day-to-day decisions, Lutnick said. Intel’s shares jumped 5.5 per cent to close at $24.80 on Friday, though the company declined to comment.
The deal follows a $2 billion capital injection from SoftBank, but analysts caution that despite fresh funding, Intel continues to grapple with a weak product pipeline and difficulties in attracting foundry customers.
A Test of Turnaround Leadership
Tan, who became CEO in March, is under pressure to reverse Intel’s fortunes. The company recorded a net loss of $18.8 billion in 2024, its first annual loss since 1986, and has not posted positive free cash flow since 2021.
Trump’s aggressive strategy underscores his view that national security hinges on securing semiconductor capacity and critical minerals. Alongside Intel, the administration has orchestrated deals in rare earths and advanced chips as part of a wider push to bring strategic industries under tighter US control.
