US President Donald Trump on Friday declared that the United States would take a 10% stake in Intel as part of a deal with the beleaguered chip giant, marking further possible government interventions into private business.
The deal includes the U.S. buying a 9.9% stake in Intel for $8.9 billion, or $20.47 per share—about $4 lower than Intel's Friday close of $24.80. The government will buy 433.3 million shares, paid for with $5.7 billion in unspent CHIPS Act grants and $3.2 billion set aside for Intel through the Secure Enclave program.
Intel stock dropped 1.2% in after-hours trade following the news. The action follows a meeting earlier this month between President Trump and Intel CEO Lip-Bu Tan, in which the President asked Tan to resign amid his relations with Chinese companies.
"He came in wanting to stay in his job and he gave us $10 billion for the United States. So we gained $10 billion," Mr. Trump said on Friday.
Commerce Secretary Howard Lutnick confirmed the deal was finalized on X, saying, "The United States of America now owns 10% of Intel," and calling the agreement "fair to Intel and fair to the American People."
Even though Mr. Trump did not specify the $10 billion, the stake is approximately equal to how much Intel was to be awarded from CHIPS Act grants that were intended to go toward domestic chip production. The investment is part of a trend of unusual U.S. agreements, including enabling AI chip manufacturer Nvidia to export H20 chips to China for a 15% cut of the sales.
Other measures involve the Pentagon taking a stake in a small mining company to boost production of rare earth magnets, and the U.S. government gaining a "golden share" with veto powers in a Nippon Steel takeover of U.S. Steel.
The move has also raised concerns among critics that these interventions are creating new corporate risks. Reuters reported earlier that the Trump administration attempted to renege on $7.9 billion in Biden-era cash grants for Intel and turn them into an equity stake.
A White House official said Thursday that equity stakes are not being considered for other firms such as TSMC or Micron, which have increased U.S. investments. SoftBank, meanwhile, agreed on Monday to invest $2 billion in Intel.
Synovus Trust senior portfolio manager Daniel Morgan said, "Without government assistance or another more financially robust partner, it will be hard for Intel foundry business to raise sufficient capital to continue to expand more Fabs at an affordable clip," and further mentioned that Intel "has to catch up with TSMC from a technology standpoint to win business."
Mr. Lutnick stated that the U.S. interest would be non-voting, so the government couldn't control the operations of the company.
Intel refused to make comments on Friday. Experts said that government support could give temporary respite to Intel's money-losing foundry business, but the company still has problems with its product pipeline and luring customers into new plants.
Since becoming CEO in March, Mr. Tan has been charged with reinvigorating Intel, which recorded a loss of $18.8 billion for 2024—the first year of losses since 1986. Intel's most recent year of positive adjusted free cash flow was 2021.
President Trump has followed a unique national security strategy, advocating multibillion-dollar government contracts in semiconductors and rare earths, such as pay-for-play deals with Nvidia and agreements with rare-earth supplier MP Materials.
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