U.S. Takes Quiet Stake in Intel to Fuel Chip Industry Revival

The U.S. government has entered into an agreement to acquire a 9.9% stake in Intel Corporation (INTC), purchasing 433.3 million shares at $20.47 per share, according to a statement from the chipmaker. The investment, valued at $8.9 billion, is intended as a nonvoting, passive ownership stake with no representation on the board or governance rights. Intel emphasized that the government will also agree to vote in alignment with the company’s board of directors, reinforcing the corporate governance structure [6]. The shares were acquired using $5.7 billion from previously awarded but unallocated CHIPS and Science Act grants and $3.2 billion from the Secure Enclave program, a government initiative focused on secure computing [6].

This move comes as part of a broader shift in U.S. industrial policy, with the government increasingly stepping into private industry to secure national interests. The deal is also seen as a strategic effort to bolster the domestic semiconductor industry, particularly as global competition intensifies. Intel, which remains the only large-scale U.S.-based manufacturer of leading-edge chips, is navigating a complex restructuring plan that includes workforce reductions, delayed factory expansions, and a refocused investment strategy [4]. The company’s market capitalization has dropped significantly since 2021, and its ability to compete with rivals like Advanced Micro Devices (AMD) and Nvidia in the AI chip space has been widely questioned [6].

Commerce Secretary Howard Lutnick stated that the government would be converting grants into equity, a move he described as fair compensation for the American people. “We should get equity for our money,” Lutnick told CNBC. He emphasized that this approach differed from traditional grant funding, which he said offered little return to taxpayers [4]. The government’s equity stake is nonvoting, but it aligns with a growing trend of equity-based interventions, as seen in recent deals involving rare earths and semiconductor manufacturing [8].

The investment adds to a series of recent developments for Intel, including a $2 billion equity stake from Japanese investment giant SoftBank. That transaction, announced on August 21, is expected to provide additional financial stability during the company’s ongoing turnaround [5]. Intel CEO Lip-Bu Tan, who took office in late 2024, has been tasked with revitalizing a firm that reported an $18.8 billion loss in 2024, its first annual deficit since 1986. The company’s restructuring plan includes cost-cutting measures, delayed international plant construction, and a refocus on U.S. manufacturing [8].

Despite these challenges, the U.S. government’s stake in Intel is expected to enhance the company’s access to capital and provide long-term stability. The investment is in addition to $2.2 billion in CHIPS Act grants already received, bringing the total government investment in Intel to $11.1 billion [6]. Analysts suggest that while the deal may introduce some uncertainty, it reflects the critical role of semiconductor manufacturing in national security and economic resilience [4].

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[1] Intel Corp. (INTC) Gets 23% Boost on US Govt Backing (https://finance.yahoo.com/news/intel-corp-intc-gets-23-163129853.html)

[2] move could erode trust in chip giant: expert ... (https://www.globaltimes.cn/page/202508/1341301.shtml)

[3] Intel Corp. (INTC) Falls 7% on Increasing Govt Interference (https://finance.yahoo.com/news/intel-corp-intc-falls-7-144457580.html)

[4] US in talks over 10% Intel stake, White House confirms (https://www.bbc.com/news/articles/c620gg77epxo)

[5] Intel stock surges 10% as SoftBank takes $2 billion stake in ... (https://finance.yahoo.com/news/intel-stock-surges-10-as-softbank-takes-2-billion-stake-in-ailing-chip-company-123540091.html)

[6] Trump says US will take 10% stake in Intel - Yahoo Finance (https://finance.yahoo.com/news/trump-says-us-will-take-10-stake-in-intel-180452265.html)

[7] Intel stock rises on report Trump administration stake in ... (https://www.cnbc.com/2025/08/22/intel-goverment-equity-stake.html)

[8] Trump says Intel has agreed to deal for US to take 10% ... (https://www.reuters.com/business/trump-says-intel-has-agreed-deal-us-take-10-equity-stake-2025-08-22/)