U.S. Government Acquires 9.9% Stake in Intel for $89 Billion

The U.S. government has made a significant investment in Intel Corporation, acquiring a 9.9% stake in the company for $89 billion. This move makes the U.S. government the largest single shareholder in Intel, surpassing Vanguard, which previously held the largest stake at 8.4%. The investment was made at a price of $20.47 per share, with funds sourced from a $57 billion allocation from the CHIPS and Science Act, as well as a $32 billion grant from other national security projects.

The U.S. government's investment in Intel is a strategic move aimed at bolstering the country's leadership in the semiconductor industry. The investment is expected to support Intel's initiatives in technology and manufacturing, which are critical for national security and economic competitiveness. The government's stake in Intel is described as a "passive investment," meaning it will not involve itself in the company's board decisions or have information disclosure rights. Additionally, the government has been granted a five-year warrant to purchase an additional 5% of Intel's shares at an exercise price of $20 per share, contingent on Intel's ownership of its semiconductor manufacturing business falling below 51% at a future point.

This investment is part of a broader effort to enhance the U.S.'s technological prowess and ensure its leadership in areas such as artificial intelligence, 5G, and quantum computing. By investing in Intel, the U.S. government aims to foster innovation, create jobs, and stimulate economic growth in the technology sector. The move is also seen as a way to counter competition from other countries, particularly in the semiconductor industry, where the U.S. has been facing challenges in maintaining its leadership.

The U.S. government's decision to become a major shareholder in Intel reflects its commitment to supporting the development of advanced semiconductor technologies. This investment is expected to have broader implications for the technology industry, as the government can influence Intel's strategic decisions to align with national priorities. The move is seen as a way to promote innovation and technological advancement in the U.S., while also supporting the country's economic and national security interests.

Prior to this investment, Intel had announced a $20 billion investment from Japan's SoftBank Group. This investment was announced shortly after media reports surfaced about discussions between Intel and the U.S. government regarding government investment in the company. The U.S. government's investment in Intel is part of a larger effort to strengthen the country's semiconductor industry and ensure its leadership in this critical sector.