Hajra Naz
United States Commerce Secretary Howard Lutnick has confirmed that the federal government is pushing for an equity stake in Intel as part of ongoing discussions over multibillion-dollar cash grants previously approved under former President Joe Biden’s CHIPS and Science Act.
The move represents a major shift in Washington’s approach to semiconductor subsidies. Instead of outright grants, the Trump administration wants to convert subsidies into equity stakes—ensuring U.S. taxpayers share in the upside of America’s most critical chipmaker.
Treasury Signals Possible 10% U.S. Stake in Intel
On Tuesday, Treasury Secretary Scott Bessent said that any U.S. investment in Intel would be aimed at stabilizing the struggling semiconductor giant as it tries to catch up with competitors like Nvidia, AMD, and TSMC.
When asked about reports that the U.S. is considering a 10% equity stake in Intel, Bessent told CNBC’s Squawk Box:
“The stake would be a conversion of the grants and maybe even an increased investment into Intel to help stabilize chip production here in the U.S.”
Bessent did not disclose the potential size, timing, or structure of the deal. However, he stressed that no stake would be tied to forcing American companies to buy Intel’s chips.
His remarks marked the first official confirmation from the Trump administration following a Bloomberg News report that the U.S. government is weighing a $7.9 billion equity-for-grants swap with Intel.
Read More: SoftBank + Intel: $2B Deal That Could Reshape AI Chips
‘Not Governance, Just Equity’
Commerce Secretary Lutnick emphasized that Washington does not intend to exert corporate control over Intel.
“We should get an equity stake for our money. Instead of just giving grants away, we’ll get equity in return. This isn’t governance—it’s about converting what was a grant under Biden into equity for the Trump administration and the American people.”
Lutnick said any stake would be non-voting, meaning the U.S. government would not interfere with Intel’s operations or board decisions.
This marks a significant departure from the Biden-era subsidy model, which handed out grants to Intel, TSMC, and other chipmakers with no expectation of financial returns.
Global Investment Pressure Mounts
Lutnick’s comments came one day after SoftBank Group revealed a $2 billion investment in Intel. The deal shows rising global interest in saving the U.S. chipmaker.
Intel was once the crown jewel of Silicon Valley. It pioneered microprocessor innovation. But in recent years, the company has stumbled. Delays in manufacturing, poor leadership decisions, and heavy competition from TSMC, Nvidia, and AMD have weakened its position.
In 2024, Intel posted an $18.8 billion loss. It was the company’s first annual loss since 1986. Now, Intel is in the middle of a huge restructuring. The plan is to shrink its workforce from nearly 100,000 employees to about 75,000. This will happen through layoffs and natural attrition.
New CEO Lip-Bu Tan, appointed in March 2025, has been tasked with spearheading Intel’s turnaround. Although former President Trump initially criticized Tan and called for his resignation, he later praised the CEO after meeting him last week, calling his story “amazing.”
Read More: Intel CEO Pushes Back After Trump Demands His Resignation
Chip Wars, AI Demand, and National Security
The stakes are high. Chips are the backbone of everything from AI systems and cloud computing to electric vehicles and defense technologies. Intel’s decline has left the U.S. heavily reliant on overseas foundries, particularly Taiwan-based TSMC, which produces the world’s most advanced semiconductors.
The CHIPS Act was designed to reverse this dependency by reshoring semiconductor production and reducing national security risks. But critics argue that handing out subsidies without equity has been a missed opportunity for taxpayers.
The Trump administration’s strategy of demanding an ownership stake could set a new precedent in industrial policy, aligning with global trends where governments seek “sovereign equity” in strategic industries.
If finalized, the deal could reshape not only Intel’s future but also the broader U.S. semiconductor strategy at a time when AI-driven demand for high-performance chips is skyrocketing.
FAQs
1. Why does the U.S. want an equity stake in Intel?
The government wants to protect taxpayer money by receiving ownership value in exchange for subsidies, rather than offering free grants.
2. How much of Intel could the U.S. government own?
Reports suggest up to a 10% non-voting stake valued at around $7.9 billion, though final details are still under negotiation.
3. Will this affect Intel’s day-to-day operations?
No. Officials, including Commerce Secretary Lutnick, have said the stake would be non-voting, meaning Washington will not control Intel’s business decisions.
4. Why is Intel struggling compared to rivals?
Intel has faced manufacturing delays, leadership challenges, and fierce competition from TSMC, Nvidia, and AMD, which have dominated cutting-edge chipmaking and AI hardware.
5. How does this deal fit into the U.S.-China tech rivalry?
The U.S. sees semiconductors as a national security priority. By investing in Intel, Washington aims to strengthen domestic chip production and reduce reliance on Taiwanese and Chinese supply chains.
