Hajra Naz
WASHINGTON —President Donald Trump on Friday revealed that the U.S. government has acquired a 10% stake in Intel, marking one of the most dramatic government interventions in the tech sector in years.
The deal, worth $11.1 billion, converts previously pledged funds into equity. The government now holds 433.3 million non-voting Intel shares, priced at $20.47 each—below Friday’s $24.80 closing price. On paper, that gives taxpayers a $1.9 billion gain.
” Trump wrote in a post.
“This is about America’s future. We now fully own and control 10% of Intel, a great American company with even greater potential”.
Intel’s Struggles and Leadership Shake-Up
The move comes as Intel faces deep challenges. Once a symbol of Silicon Valley dominance, the company has lost over $22 billion since 2023 and is cutting more than 20,000 jobs.
CEO Lip-Bu Tan, who has been in charge for just five months, was initially targeted by Trump over his past Chinese investments. But after Tan reaffirmed his loyalty to the U.S. and met with Trump at the White House, the administration threw its support behind him. Trump has since praised him as a “highly respected” leader.
Tan, in turn, applauded the deal:
“We are grateful for the confidence the President and the Administration have placed in Intel, and we will advance U.S. technology leadership together.”
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A Strategic but Risky Investment
The stake largely comes from funds tied to the CHIPS and Science Act, which began under President Biden to boost U.S. chipmaking. Trump, who criticized the act as a “giveaway,” reframed it as a profitable investment.
In total:
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$7.8B pledged under CHIPS (with $2.2B already used)
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$3.2B redirected from the “Secure Enclave” program
The U.S. won’t have a board seat and cannot vote with its shares. Still, it is now one of Intel’s largest shareholders, raising concerns about political interference in a highly competitive industry.
Critics warn that U.S. companies could feel pressured to buy Intel chips to stay in Trump’s good graces. “It’s a horrendous move with real risks for U.S. tech leadership,” said Scott Lincicome of the Cato Institute.
Market Context
Intel’s current stock trades at around $25, still down over 60% from its $75 peak in the late 1990s. Meanwhile, rival Nvidia is valued at $4.3 trillion, dwarfing Intel’s $108 billion market cap.
The U.S. government taking equity in major companies is rare but not unprecedented. In 2008, Washington acquired a 60% stake in General Motors, later selling at a $10 billion loss.
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The Bigger Picture: U.S. vs. China
Trump has consistently tied tech policy to his trade war agenda, aiming to cut reliance on Asian manufacturing and secure America’s edge in artificial intelligence.
Already, his administration requires Nvidia and AMD to pay a 15% commission on chip sales in China in exchange for export licenses—a controversial policy reshaping global supply chains.
With Intel, Trump is betting that U.S. taxpayer money—now turned into equity—will fuel a long-awaited turnaround and reinforce America’s position in the global chip race.
FAQs
1. Why did the U.S. take a 10% stake in Intel?
The stake comes from converting $11.1 billion in government grants and pledges into equity, aiming to boost domestic chipmaking and secure U.S. tech leadership.
2. Does the government control Intel now?
No. The U.S. holds non-voting shares, meaning it cannot influence Intel’s board decisions or operations directly.
3. Why is Intel struggling?
Intel has faced years of missed opportunities, losing ground to rivals like Nvidia and AMD, while also suffering major financial losses since 2023.
4. Is this similar to the GM bailout in 2008?
Yes. The government also took equity in General Motors during the financial crisis, though that stake was much larger (60%).
5. What are the risks of this deal?
Critics argue the move blurs the line between public and private sectors, risks political meddling, and may push companies into unfairly favoring Intel.
