US Government to Acquire Nearly 10% Stake in intel
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Washington, D.C. – August 23, 2025 - In a surprising turn of events, the United States government will acquire approximately 9.9 percent equity in semiconductor giant Intel, following an agreement announced Friday by President Donald Trump. The investment, valued at $8.9 billion, stems from a deal initially discussed during a meeting between Trump and intel CEO Lip-Bu Tan, who recently assumed the role following Pat Gelsinger’s retirement.
The Deal’s Genesis and financial Details
President Trump revealed the agreement during a press conference, stating, “He walked in wanting to keep his job and he ended up giving us 10 billion dollars for the United States.So we picked up 10 billion.” The investment will be funded through a combination of previously allocated CHIPS Act funds – $5.7 billion – and resources from the Secure Enclave program, totaling $3.2 billion. Intel has already received $2.2 billion in CHIPS grants, bringing the total government investment in the company to $11.1 billion.
The government acquired shares at a price of $20.47 per share. This is not a grant, but a direct investment, reflecting a strategic shift in how the administration supports domestic semiconductor manufacturing.
Did You No?
The CHIPS Act, signed into law in 2022, aims to bolster U.S. semiconductor production and reduce reliance on foreign manufacturers.
strategic Implications and Voting Rights
While initial reports suggested a non-voting stake, Intel clarified in a press release that the government’s common stock holdings will carry voting rights. However, the government has committed to aligning its votes with Intel’s board of directors, except in limited circumstances. this arrangement aims to balance government oversight with the company’s operational independence.
the move comes as Intel navigates a period of significant change. Tan’s appointment as CEO followed Gelsinger’s unexpected departure, and the company has already announced plans to reduce its workforce by 20 percent.The investment is seen as crucial to supporting Intel’s ambitious expansion plans and addressing ongoing challenges in advanced chip manufacturing.
Investment Breakdown
| Funding Source | Amount (USD Billions) |
|---|---|
| CHIPS Act (Previously Allocated) | 5.7 |
| Secure enclave Program | 3.2 |
| Previous CHIPS Grants | 2.2 |
| Total Government Investment | 11.1 |
Intel was initially slated to receive up to $10.86 billion in federal funding under the CHIPS Act to bolster its domestic chip production capabilities. This equity stake ensures those funds are delivered, albeit in a different form.
Pro Tip:
Understanding the CHIPS Act is key to grasping the broader context of this investment and its implications for the U.S. tech industry.
Broader Context: US Tech Policy and Global Competition
This investment in Intel marks a departure from customary government support models for the semiconductor industry. the Trump administration has also reportedly reached a separate agreement with NVIDIA and AMD, allowing them to export certain products to China in exchange for a percentage of thier profits. These moves signal a more assertive approach to securing U.S. technological leadership in the face of growing global competition.
The administration has indicated it does not plan to pursue similar equity stakes in other CHIPS Act recipients. Though, the Intel deal sets a precedent for potential future interventions in strategically critically important industries. What impact will this new model of government investment have on other tech companies? And how will it affect the balance of power in the global semiconductor market?
The Future of Semiconductor Manufacturing
the semiconductor industry is at a critical juncture, driven by increasing demand for chips in everything from smartphones and automobiles to artificial intelligence and defense systems. The U.S. government’s investment in intel reflects a growing recognition of the strategic importance of domestic chip production. This move is part of a broader effort to reshore manufacturing, reduce supply chain vulnerabilities, and maintain technological competitiveness.The success of this strategy will depend on continued innovation, skilled workforce development, and effective collaboration between the public and private sectors.
Frequently Asked Questions
- What is the primary goal of the US government’s investment in Intel? To strengthen domestic semiconductor manufacturing and reduce reliance on foreign suppliers.
- How much equity will the US government own in Intel? Approximately 9.9 percent.
- Will the government have a say in Intel’s management? The government will have voting rights but has agreed to align with the board of directors in most cases.
- What is the CHIPS Act? A 2022 law providing funding for U.S.semiconductor research and manufacturing.
- Is this investment unique to Intel? The administration has stated it doesn’t plan similar equity deals with other CHIPS Act recipients,but has made other arrangements with companies like NVIDIA and AMD.
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