The stake, valued at approximately $11 billion, was acquired without a direct cash payment. Instead, the government converted $5.7 billion in grants previously awarded to Intel under the 2022 CHIPS and Science Act, along with $3.2 billion from a classified program known as Secure Enclave, into equity. The administration has pledged to vote with Intel's current board on most matters, foregoing direct board representation "with limited exceptions."
President Trump hailed the negotiation with Intel CEO Lip-Bu Tan as a "Great Honor" and a "great Deal for America," emphasizing that building leading-edge semiconductors is "fundamental to the future of our Nation." This intervention is highly unusual as it occurs outside of a financial crisis, unlike the government's temporary stakes in companies during the 2008-2009 meltdown.
The move is the latest in a series of actions where the administration has flexed power over big business. Earlier this month, Trump secured deals with chipmakers Nvidia and AMD requiring them to pay the U.S. government 15% of their revenues from certain sales to China in exchange for export licenses.
For Intel, which has struggled to keep pace with rivals like Nvidia and AMD during the AI boom, the government's stake provides a significant capital infusion. The company's shares are down roughly 60% from their pandemic-era highs. The investment also follows a recent $2 billion investment from Japan’s SoftBank, signaling a concerted effort to strengthen U.S. semiconductor innovation.
The move received some bipartisan acknowledgment, with Senator Mark Warner (D-Virginia) stating that while the equity stake's approach may be debated, the goal of protecting American innovation and national security is clear. However, the action fundamentally reshapes the relationship between the U.S. government and corporate America, trading taxpayer funds for direct ownership in a struggling tech champion.