President Donald Trump announced Friday that the U.S. government has acquired a 10% stake in Intel, marking a significant intervention in the technology sector. The stake was secured through the conversion of $11.1 billion in previously issued funds and pledges, resulting in ownership of 433.3 million shares of non-voting stock at $20.47 per share—a price below Friday’s closing value.
“The United States of America now fully owns and controls 10% of INTEL, a Great American Company that has an even more incredible future,” Trump stated.
This acquisition makes the government one of Intel’s largest shareholders as the company undergoes major restructuring, including plans to lay off over 20,000 employees after years of underperformance and leadership changes. Lip-Bu Tan, who became CEO five months ago, faced scrutiny earlier this month regarding his previous investments in Chinese firms but reaffirmed his commitment to U.S. interests following public pressure from President Trump.
After meeting with Tan at the White House and receiving assurances about his loyalty to the U.S., Trump shifted his stance on Tan’s leadership: “highly respected” CEO.
Tan responded by expressing appreciation for federal support: “We are grateful for the confidence the President and the Administration have placed in Intel, and we look forward to working to advance U.S. technology and manufacturing leadership.”
Intel’s current market capitalization is approximately $108 billion—significantly lower than its historical peak or that of leading competitor Nvidia, which is valued at $4.3 trillion.
The funding for this deal primarily comes from grants made available through the CHIPS and Science Act, originally enacted during President Joe Biden’s administration to promote domestic chip manufacturing and reduce reliance on overseas production facilities (https://www.whitehouse.gov/briefing-room/statements-releases/2022/08/09/fact-sheet-chips-and-science-act-will-lower-costs-create-jobs-strengthen-supply-chains-and-counter-china/). The Trump administration has repurposed these incentives with hopes not only to strengthen domestic industry but also potentially profit from them.
“We think America should get the benefit of the bargain,” said Commerce Secretary Howard Lutnick earlier this week. “It’s obvious that it’s the right move to make.”
Of the pledged government funds under incentive programs like CHIPS ($7.8 billion), only part had been distributed so far; additional investment comes from another program called “Secure Enclave.”
Despite not having voting rights or board representation at Intel, critics warn about potential negative consequences stemming from increased government involvement in private enterprise. Scott Lincicome from Cato Institute argued: “Overall, it’s a horrendous move that will have real harms for U.S. companies, U.S. tech leadership, and the U.S. economy overall.”
Some investors also expressed concern about possible political interference in business decisions at Intel moving forward.
“I don’t see the benefit to the American taxpayer, nor do I see the benefit necessarily to the chip industry,” said Nancy Tengler, CEO of Laffer Tengler Investments.
“I don’t care how good of businessman you are, give it to the private sector and let people like me be the critic and let the government get to the business of government,” Tengler added.
Government stakes in major corporations are rare but not without precedent; during 2008’s financial crisis, federal intervention resulted in temporary majority ownership of General Motors before divestment led to losses (https://www.reuters.com/article/us-autos-gm-treasury/u-s-government-sells-final-shares-in-gm-ends-bailout-idUSBRE9B80T320131209).
The timing aligns with broader efforts by President Trump aimed at reshoring manufacturing jobs as part of ongoing trade disputes worldwide—particularly those involving China—and ensuring national security through control over critical technologies such as artificial intelligence chips (https://www.cnbc.com/2024/06/15/trump-admin-pushes-to-limit-ai-chip-exports-to-china.html).
In addition to acquiring a stake in Intel, Trump’s administration requires companies like Nvidia and Advanced Micro Devices—which supply AI chips—to pay commissions on sales made within China as a condition for export licenses.
