Intel issued to U.S. Department of Commerce 274.6 million shares of common stock and a warrant to purchase up to 240.5 million shares of common stock

Intel issued to U.S. Department of Commerce 274.6 million shares of common stock and a warrant to purchase up to 240.5 million shares of common stock

Intel (INTC) has received a significant investment from the U.S. government, totaling $5.7 billion, as part of a deal that sees the U.S. Department of Commerce acquiring a 10% stake in the semiconductor giant. The investment, announced on August 28, 2025, is aimed at preventing Intel from selling its chip manufacturing division. Intel's CFO, David Zinser, confirmed the receipt of the funds during an investor conference on August 29, 2025 [1].

The deal involves the U.S. government acquiring 274.6 million shares of Intel's common stock and a warrant to purchase up to 240.5 million shares at $20.47 each. This investment is funded by $5.7 billion in unpaid grants previously awarded to Intel under the U.S. CHIPS and Science Act and $3.2 billion from the Secure Enclave program [2].

Intel's shares have been volatile since the announcement. After surging 5.5% on Friday, August 27, 2025, following the news of the deal, the shares rebounded more than 4% in early trading on Monday, August 30, 2025, but finished the session down 1% at $24.55. Despite the volatility, Intel shares have gained 23% since the start of the year, significantly outperforming the S&P 500 over the same period [3].

The investment has been described as a "moderate vote of confidence" by Bank of America analysts, who expect Intel's net leverage to improve by 0.3x–0.4x in 2025 and 2026. However, free cash flow estimates are lowered by $3 billion in 2025 and $2 billion in 2026 to reflect the shift in grant accounting [4].

Intel is now focused on acquiring clients for its next-generation 14A manufacturing process and aims to shelve plans to raise outside capital. The U.S. government's stake in Intel is passive, meaning it cannot directly influence the chip maker's operations. This move is part of a series of unprecedented actions by the Trump Administration to bolster domestic semiconductor production [5].

References:

[1] https://www.cnbc.com/2025/08/28/intel-trump-deal-commerce.html
[2] https://www.investopedia.com/watch-these-intel-stock-price-levels-after-chipmaker-agrees-to-give-government-10-percent-stake-11796631
[3] https://www.ainvest.com/news/intel-receives-8-9b-investment-govt-prevent-chip-manufacturing-sale-2508/
[4] https://www.tomshardware.com/tech-industry/semiconductors/intel-confirms-it-has-already-received-usd5-7-billion-from-us-government-cfo-claims-the-deal-was-to-halt-the-sale-of-its-chip-fabs