Today's News: U.S. Government Acquires 10% Equity Stake in Intel

The deal follows President Trump’s earlier public criticism and demand for the resignation of Intel CEO Lip-Bu Tan, who subsequently met with Trump to negotiate the agreement.

Terrence Dorsey

Aug 23, 2025

Photo: Dado Ruvic/Reuters

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Date: August 22, 2025
Topic: U.S. Government Acquires 10% Equity Stake in Intel
Summary: The U.S. government, under President Trump, has announced an agreement to acquire a roughly 10% equity stake in Intel, the struggling semiconductor manufacturer. This investment, valued between $8.9 billion and $11.1 billion, is largely financed by converting previously awarded grants from the CHIPS and Science Act and the Secure Enclave program into shares. Described as an unprecedented government intervention in a private company outside of an economic crisis, the move aims to bolster domestic semiconductor manufacturing and national security. The deal follows President Trump’s earlier public criticism and demand for the resignation of Intel CEO Lip-Bu Tan, who subsequently met with Trump to negotiate the agreement. The government will hold a passive ownership stake without board representation.

Sources

Key Points

The U.S. government is acquiring a roughly 10% equity stake in Intel, a leading but troubled chipmaker.
The investment amount is cited as approximately $8.9 billion to $11.1 billion, primarily funded by converting existing CHIPS Act grants and Secure Enclave program funds into shares.
The government will maintain a passive ownership, meaning no board representation or direct governance rights.
President Trump personally negotiated and announced the deal, portraying it as a significant achievement for the U.S.
This action is viewed as an extraordinary and unprecedented government intervention in a private company outside of a major economic crisis.
Intel has been struggling, falling behind competitors like Nvidia and Taiwan Semiconductor Manufacturing Company (TSMC) in recent years.
The agreement follows President Trump’s earlier public demand for Intel CEO Lip-Bu Tan’s resignation due to alleged ties to Chinese companies, after which Tan met with Trump.

Unique Highlights

The New York Times details the negotiation timeline, from Trump’s call for resignation to the board’s approval and the finalization of terms. It also raises concerns about potential legal challenges to the deal under the CHIPS Act and notes that the Trump administration was withholding some of Intel’s federal grants prior to the agreement.
CNN provides specific figures, stating the government is purchasing 433.3 million shares at $20.47 per share, equating to a 9.9% stake. It also includes a quote from Treasury Secretary Scott Bessent confirming the White House does not plan to pressure other tech companies to buy Intel’s chips, and mentions Japan’s SoftBank investing $2 billion in Intel earlier the same week.
NBC News highlights that the U.S. pledged to vote with Intel’s current Board of Directors “with limited exceptions.” It references a 2003 Congressional study cautioning that government stakes in public companies would “not offer a free lunch” and expose taxpayers to “greater risk.” It also identifies the Secure Enclave program as a “formerly classified initiative” funded by Congress in 2024 after Intel’s lobbying.
Fox Business points out other recent interventionist actions by the Trump administration, such as the Pentagon becoming the largest shareholder in a mining company (MP Materials) and the U.S. government securing a “golden share” with veto rights in Nippon Steel’s acquisition of U.S. Steel. It also notes the political significance of Intel’s proposed Ohio factory, being in the home state of Vice President JD Vance.
The Washington Post highlights differing political reactions, quoting Senator Rand Paul (R-Kentucky), who called the deal a “terrible idea” and a “step toward socialism,” while Senator Bernie Sanders (I-Vermont) supported the idea of taxpayers getting a return on investment. It also features analysis from G. Dan Hutcheson attributing Intel’s struggles to “bad management decisions,” including outsourcing manufacturing to TSMC, and details former CEO Pat Gelsinger’s ousting after a significant annual loss in 2024.
The Wall Street Journal reveals a specific clause in the agreement where the government could acquire an additional 5% stake at $20 a share if Intel’s ownership in its foundry business falls below 51%. It also quotes Bernstein Research analyst Stacy Rasgon stating, “What they really need is capability… That’s not really something the government can help with,” and mentions Intel CEO Lip-Bu Tan has clashed with the company’s board about future strategy.

Contrasting Details

Cost of the Stake: President Trump, as quoted by CNN, NBC News, The Washington Post, and Fox Business, claimed, “The United States paid nothing for these Shares.” However, Intel’s statement and other reporting (The New York Times, CNN, The Washington Post, The Wall Street Journal) clarify that the $8.9 billion investment is made by converting previously awarded CHIPS Act grants and Secure Enclave program funds into equity, effectively using allocated federal funds to purchase shares at a specified price ($20.47 per share, according to CNN and The Washington Post). This contradicts Trump’s assertion of “paid nothing.”
Government’s Future Influence: While all articles state the government will have a passive ownership without board representation or governance rights, and CNN quotes Treasury Secretary Scott Bessent saying the White House won’t pressure companies to buy Intel chips, several sources raise concerns about potential indirect influence. The New York Times suggests the deal could lead to the perception of Intel being “too big to fail” and questions whether officials could pressure other companies to become Intel customers. The Wall Street Journal quotes analysts speculating the government “could help arrange deals or urge companies to buy from Intel,” and that it indicates the government will play a “much more influential role” to keep the foundry alive. The Washington Post also queries the need for “guardrails to ensure that a government stake doesn’t result in unhelpful political influence.”

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