BUSINESS – President Donald Trump announced on August 22, 2025, that the U.S. government would acquire a 10% stake in Intel, as part of a landmark agreement with the embattled semiconductor giant. Under the deal, the government will convert roughly $8.9 billion in previously awarded CHIPS Act grants and Secure Enclave program funding into Intel equity. The shares will be purchased at $20.47 each, about $4 below Intel’s closing price of $24.80.
This arrangement comes after weeks of tension between Trump and Intel’s CEO, Lip-Bu Tan—Trump had urged his resignation due to alleged ties to Chinese firms. In a surprising turn, the agreement not only preserves Tan’s leadership but also channels vital funding to the company for domestic chip fabrication expansion.
The stake is designated as non-voting, meaning the government gains no direct control over Intel’s governance. Still, critics argue this signals deeper federal intervention into private sector management and sets a new policy tone in U.S. industry.
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Federal funding will now be structured as equity rather than grants, potentially redefining the nature of government support for technology firms. This tactic aligns with broader initiatives under Trump’s administration, such as demanding a 15% share of Nvidia’s Chinese chip sales and securing “golden shares” in strategic industry cases.
The market response was immediate: Intel shares rose around 6%, reflecting investor optimism about government backing. At the same time, analysts remain cautious about the company’s long-term viability—especially its foundry arm, which has suffered from a weak product roadmap and difficulty attracting clients.
Intel’s foundry sector is especially under pressure. Analysts say government funding may provide temporary relief, yet success hinges on capturing customer commitments for its advanced manufacturing nodes (14A, 18A). Without clients, even substantial capital injections may fall short.
This move represents a strategic pivot to safeguard U.S. semiconductor sovereignty but raises broader questions about the balance between free-market principles and industrial policy. Policymakers are now recalibrating expectations—will this become a new norm for funding critical infrastructure, or a one-off intervention? The full repercussions of this agreement on governance, taxpayer stakes, and industry competition are yet to unfold.
