The U.S. government will officially own a 10 percent stake in Intel after President Donald Trump approved the conversion of Chips Act grants into equity. This unprecedented agreement is seen as a move to strengthen the national semiconductor industry while giving Intel much-needed support as it struggles against fierce competition from Nvidia and AMD.
Deal Breakdown
The agreement involves $8.9 billion previously allocated to Intel. This includes $5.7 billion in grants from the Chips and Science Act and an additional $3.2 billion from the Secure Enclave program. Instead of distributing the funds in cash, the government converted them into equity by purchasing 433.3 million Intel shares at $20.47 per share, a price lower than the market close of around $24.80.
The shares purchased by the U.S. government are passive, meaning there will be no board seats or direct operational control. However, the government retains voting rights as a shareholder, with limited exceptions as outlined in the agreement.
Additional Options and Long-Term Strategy
Under an additional clause, the government has the option to purchase up to 5 percent more shares if Intel loses majority control of its foundry unit. This right is valid for five years at a fixed price of $20 per share. The clause was designed to ensure national protection against potential foreign influence in a sector considered vital to national security.
Trump also emphasized that this would not be the last such move. He promised to pursue similar deals with other technology companies to further strengthen America’s strategic industries. This approach aligns with his broader interventionist policies, including restrictions on AI chip exports to China and the government’s push for a “golden share” in U.S. Steel.
Impact on Intel and the Stock Market
Intel is the immediate winner in this deal. Government backing signals to markets that the company remains central to U.S. industrial priorities. Shares of Intel jumped between 5 and 6 percent following the announcement.
The new capital provides Intel with critical resources to accelerate restructuring its loss-making foundry unit. The company also gains momentum to expand semiconductor manufacturing capacity in the U.S., supported by other outside investments such as SoftBank’s recent $2 billion funding commitment.
Criticism and Debate
The deal has sparked sharp political debate. Critics argue it blurs the line between free-market principles and government intervention. Senator Rand Paul condemned the agreement as a step toward industrial socialism. Meanwhile, Democratic lawmakers are reportedly preparing legislation aimed at curbing Trump’s executive authority over national technology policy.
Supporters, however, argue that the deal is pragmatic given the global chip supply chain crisis that recently disrupted industries from automotive to defense. By holding equity, the government is seen as securing semiconductor production at home and reducing reliance on Asian suppliers.
Global Relevance
The Trump-Intel agreement signals a turning point in U.S. industrial strategy, with stronger state involvement in critical technologies. Amid intensifying tech rivalry with China, Washington’s direct stake in Intel underscores its determination to secure dominance in chip technology, which powers artificial intelligence, electric vehicles, and defense infrastructure.
This move also sends a clear message to both allies and rivals: the U.S. is prepared to use ownership as a policy tool. The ripple effect may encourage other nations to adopt similar strategies to safeguard their own strategic industries.
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