President Donald Trump announced that the United States will acquire a 10% equity stake in Intel, marking a significant government investment in the struggling chipmaker.
An official announcement of the deal is expected soon, with Trump scheduled to meet Intel CEO Lip-Bu Tan to discuss the arrangement further.
Driving the news: This development follows a recent meeting between Trump and Tan, initially sparked by Trump demanding Tan’s resignation over his connections to Chinese firms.
- Trump highlighted that while Tan sought to keep his job, Intel ended up agreeing to provide $10 billion to the U.S., roughly equal to the amount Intel would receive from CHIPS Act grants intended to fund new chip manufacturing plants domestically.
The big picture: The proposed 10% stake corresponds to approximately $10 billion at current Intel share prices.
- Commerce Secretary Howard Lutnick clarified that the government’s equity stake would be non-voting, meaning the U.S. would not have direct control over Intel’s business operations.
- Intel’s shares responded positively to the news, rising over 6%.
Zoom out: Similar deals include an agreement with Nvidia allowing the sale of AI chips to China in exchange for the U.S. government receiving 15% of those sales revenues.The Pentagon is poised to become the largest shareholder in a small mining company boosting rare earth magnet production, critical for defense and technology sectors.
- Additionally, the government secured a “golden share” with veto rights as part of allowing Nippon Steel to acquire U.S. Steel, highlighting heightened regulatory involvement.
- CEO Lip-Bu Tan, who took the helm in March, is leading a major turnaround initiative for Intel, which posted an $18.8 billion annual loss in 2024 – its first since 1986 – with the last positive adjusted free cash flow reported in 2021.
