Chipmaker Intel has agreed to grant the U.S. government a 10% stake in its business, marking a significant development in the relationship between the company and the federal government. The deal, announced by Intel and President Donald Trump on Friday, comes as part of a larger agreement involving substantial government grants.
Under the deal, the U.S. government will receive 433.3 million shares of Intel, equating to a 9.9% stake in the company. This investment amounts to $8.9 billion, funded partially by $5.7 billion in grants from the CHIPS and Science Act, a key law passed during President Joe Biden’s term, which Trump has criticized. The remaining $3.2 billion comes from an award under Intel’s Secure Enclave program.
Intel noted that the government’s investment will be passive, meaning it will not have any board representation or influence over governance and decisions. Trump’s announcement on Truth Social highlighted that the U.S. would own the 10% stake without directly paying for it, following negotiations with Intel’s CEO, Lip-Bu Tan.
Trump expressed satisfaction with the agreement, saying, “I think it would be good having the United States as your partner… they’ve agreed to do it, and I think it’s a great deal for them.”
Commerce Secretary Howard Lutnick hailed the agreement, stating that it strengthens U.S. leadership in the semiconductor industry, an area in which the country has faced increasing competition from Asian giants like TSMC and Samsung.
However, the deal has sparked concerns among some analysts. Independent tech analyst Rob Enderle warned that this could be the start of a slippery slope toward nationalizing private businesses. Scott Lincicome, from the Cato Institute, also criticized the move, arguing that government involvement in Intel could harm its long-term viability, as political considerations could increasingly influence business decisions.
Intel, despite the concerns, emphasized its commitment to ensuring advanced technologies are made in the U.S., pointing to its investment of over $100 billion in expanding its U.S. sites. The company also noted that the deal would not affect its commercial operations.
Earlier this month, Trump had called for Intel’s CEO to resign after concerns were raised about his ties to Chinese firms, highlighting the complex nature of the relationship between the company and the U.S. government.
Image Source: AFP (Agence France-Presse)
