Intel Shares Rise Despite Government Stake Risks

Intel shares rose despite the company warning of risks from the US government's 9.9% stake, acquired through an $8.9 billion investment. Intel expressed concerns about shareholder dilution, additional regulations, and restrictions on international sales, citing 76% of its 2024 revenue coming from outside the US. President Trump said he would continue to make similar deals "for the country all day long."

Intel shares rose by 2% in early trading on Monday, despite the company expressing concerns about potential risks from the US government's 9.9% stake. The stake, valued at $8.9 billion, was acquired through a conversion of $5.7 billion in unpaid grants from the 2022 CHIPS and Science semiconductor subsidy law and $3.2 billion previously awarded for the Secure Enclave program [1].

Intel warned in a securities filing that the US government's new stake could pose several risks to its business. These include potential harm to international sales, limitations on securing future government grants, and additional regulations or restrictions that could affect the company's operations abroad [2]. The filing also noted that the shares issued to the government will be sold at a discount to the market price, diluting existing shareholders. The US is acquiring the shares at $20.80 each, $4 below the company's closing price of $24.80 on Friday [1].

Intel's CEO, Lip-Bu Tan, stated in a video posted by the Commerce Department that the company does not need the government funding but welcomes the US government as a shareholder [2]. However, the company's filing raised questions about the potential for other government entities to convert existing grants into equity investments or to withhold future grants [1].

The US government's stake could also subject Intel to additional regulations or restrictions in foreign countries, potentially impacting the company's significant non-US business operations. Sales outside the US accounted for 76% of Intel's revenue in fiscal 2024, with China contributing 29% [1].

President Trump has indicated that he would continue to make similar deals "for the country all day long," following his meeting with Intel CEO Lip-Bu Tan, during which he reportedly demanded Tan's resignation over his ties to Chinese firms [2].

References:
[1] https://www.calcalistech.com/ctechnews/article/512blkp9f
[2] https://www.tradingview.com/news/reuters.com,2025:newsml_L4N3UH0U2:0-intel-warns-us-stake-could-hurt-international-sales-future-grants/