U.S. Government Weighs 10% Stake in Intel via Chips Act Funding

The U.S. government is reportedly considering a plan to take a 10% equity stake in Intel Corporation by converting part or all of the company’s $10.9 billion in federal grants from the Chips and Science Act into ownership shares [1]. This move would position the U.S. government as Intel’s largest single shareholder, with the stake valued at approximately $10.5 billion based on the company’s current market capitalization [2]. The proposal reflects a broader strategy by the Trump administration to strengthen domestic semiconductor production and reduce reliance on foreign chip manufacturers, particularly those in Asia [3].

This potential shift in funding from grants to equity represents a significant departure from traditional forms of public support. Instead of simply providing financial incentives, the government would become a direct stakeholder, aligning its interests with Intel’s long-term performance and strategic direction [4]. Some analysts argue that this approach could streamline federal funding for the firm, accelerate project timelines like the stalled Ohio chip fabrication plants, and signal greater government commitment to the project [5]. However, the move also raises questions about governance, transparency, and the extent to which public policy goals might influence corporate operations [6].

Market reactions have been mixed. Following reports of the potential deal, Intel’s stock dropped nearly 4% in Monday trading [7]. While some investors view the government stake as a lifeline for a company struggling with production delays and stiff global competition, others remain skeptical about whether increased capital will address Intel’s deeper challenges, such as lagging in advanced chip design [8]. The deal could also set a precedent for future government investments in strategically vital industries, reshaping how public resources are deployed to support national economic and technological objectives [9].

The administration is still evaluating the legal, financial, and national security implications of the proposed equity stake [1]. A White House representative declined to comment on the details of ongoing discussions, emphasizing that no final agreement is in place until it is officially announced [2]. Meanwhile, the Pentagon has previously taken a similar approach by acquiring a majority stake in MP Materials, a U.S. rare-earth producer, to secure supply chains critical to military applications [3]. Advocates of a comparable move with Intel argue that semiconductors are even more essential to national security, particularly as China continues to invest heavily in its domestic chip industry [4].

Sources:

[1] Reuters

(https://www.reuters.com/business/trump-administration-talks-take-10-stake-intel-bloomberg-news-reports-2025-08-18/)

[2] Bloomberg.com

(https://www.bloomberg.com/news/articles/2025-08-18/trump-administration-said-to-discuss-taking-a-10-stake-in-intel)

[3] MSN

(https://www.msn.com/en-us/money/companies/trump-administration-weighs-10-stake-in-intel-to-help-bolster-chip-maker/ar-AA1KKugf)

[4] Detroit News

(https://www.detroitnews.com/story/business/2025/08/18/team-trump-in-talks-for-10-stake-in-intel-become-top-shareholder/85713823007/)

[5] TechPowerUp

(https://www.techpowerup.com/340043/u-s-government-to-take-a-10-equity-stake-in-intel)

[6] The Wall Street Journal

(https://www.wsj.com/tech/intel-us-government-stake-22a7f987?gaa_at=eafs&gaa_n=ASWzDAjAW-ZlJ0jAti0BiGRPnyGplcM4d98XYzvB2N4W7xvZYq-2frdRIzxM&gaa_sig=2w6d3NzWxf0a4hzU1ULRBU5pXj1UWcGOde0cpIhaO05qfUKrQGBxSJKoccNV-lavr427Ngo7FRAPPc2Z_spi8A%3D%3D&gaa_ts=68a38ed2)

[7] Tom's Hardware

(https://www.tomshardware.com/tech-industry/trump-administration-reportedly-mulling-a-10-percent-stake-in-intel-chips-act-funding-could-be-reworked-into-the-purchase-amount)

[8] The Verge

(https://www.theverge.com/news/760916/the-trump-administration-is-discussing-a-10-percent-stake-in-intel)

[9] Mitrade

(https://www.mitrade.com/insights/news/live-news/article-3-1048981-20250819)