Trump Admin May Trade Cash for Chips—And a 10% Stake in Intel

The U.S. Treasury is reportedly considering taking an equity stake in Intel Corporation as part of broader efforts to bolster domestic semiconductor production. This initiative is tied to the CHIPS and Science Act, which allocated significant federal funding to support the U.S. chip industry. According to reports, the Trump administration is exploring the possibility of converting some or all of the company’s grants into a 10% equity position, potentially valued at around $10 billion [4]. The move aligns with the administration’s strategic focus on strengthening U.S. leadership in critical industries such as semiconductors and rare earths [5].

Intel has received the largest amount of funding under the CHIPS Act, with $10.9 billion designated for both commercial and military production. However, the company has faced ongoing challenges in its transition to a competitive foundry business and has struggled to secure major customers for its services [5]. This has led to a slowdown in capital expenditures, including the delayed construction of its Ohio-based "Silicon Heartland" chip factory complex [3]. The project, initially projected to begin operations in the late 2020s, is now subject to market-dependent delays.

In parallel with government discussions, Intel has also secured a major private investment from SoftBank Group, which announced a $2 billion stake in the company. The investment, priced at $23 per share, reflects SoftBank’s confidence in Intel’s long-term vision for semiconductor innovation and its role in enabling the AI revolution [1]. The transaction is expected to strengthen Intel’s financial position and provide additional flexibility in its capital allocation strategy. The company’s stock responded positively to the news, surging over 9% on the announcement [2].

The broader landscape for Intel remains challenging, particularly in the AI and advanced chip manufacturing sectors. The company has lost market share to competitors such as AMD and NVIDIA and has been excluded from key segments of the AI hardware market [2]. To address these issues, Intel has undertaken significant cost-cutting measures, including a 15% reduction in its global workforce, and has restructured its strategic priorities under CEO Lip-Bu Tan [2].

The U.S. government’s potential equity stake in Intel marks a notable shift in the administration’s approach to corporate partnerships in strategic industries. While previous administrations have primarily provided financial support through grants, the Trump administration has indicated a preference for equity-based investments, which could align government and corporate interests more closely [4]. This approach reflects a broader political strategy to ensure that U.S. investments in critical infrastructure yield long-term national and economic benefits [3].

Intel has long been a focal point of U.S. efforts to restore domestic semiconductor leadership, and the combination of private and public sector support may provide the company with the resources needed to compete globally. However, the success of these initiatives will depend on the company’s ability to execute its technical roadmap and attract key customers to its foundry services. The ongoing discussions with the U.S. Treasury, as well as the recent investment from SoftBank, underscore the high stakes involved in Intel’s future and the broader implications for the U.S. chip industry.

Source:

[1] SoftBank Group and Intel Corporation Sign $2B Investment Agreement (https://newsroom.intel.com/corporate/softbank-group-and-intel-corporation-sign-2b-investment-agreement)

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

[3] Lutnick: Intel must give government equity in return for CHIPS Act funding (https://www.cnbc.com/2025/08/19/lutnick-intel-stock-chips-trump.html)

[4] Trump administration weighs 10% stake in Intel via CHIPS Act grants (https://www.cnbc.com/2025/08/19/trump-administration-weighs-10percent-stake-in-intel-via-chip-act-grants.html)

[5] Trump administration in talks to take 10% stake in Intel by converting grants to equity: Bloomberg (https://www.reuters.com/business/trump-administration-talks-take-10-stake-intel-bloomberg-news-reports-2025-08-18/)