In a bold and unconventional move, the Trump administration has converted approximately $11.1 billion in CHIPS Act and Secure Enclave grant funds into a 9.9% passive equity stake in Intel, purchasing 433.3 million non-voting shares at $20.47 each—a 17% discount to Friday’s closing price. Despite being Intel’s largest shareholder, the government gains no board seat or governance control, but reserves a five-year warrant for an additional 5% stake if Intel’s foundry ownership dips below 51%.
A “Great Deal” or Political Gamble?
President Trump hailed the transaction on Truth Social, calling it a “Great Deal for America and a Great Deal for Intel.” Intel CEO Lip-Bu Tan, once urged by Trump to resign over alleged China ties, has since been rebranded by the White House as a “highly respected” partner.
The government’s stake was struck at $20.47 per share, a 17% discount to Friday’s closing price, giving the Treasury an immediate paper gain of nearly $2 billion. The deal also includes a five-year warrant to purchase another 5% of Intel if its foundry ownership dips below 51%.
Unlike the 2008 bailouts, the government won’t take board seats, but it will hold significant influence as Intel’s largest shareholder.
Why Intel?
Intel has lost ground to rivals Nvidia and TSMC, struggling with yield problems in its 18A process and delays in its new Arizona fabs. Its stock has plunged more than 60% from pandemic highs, and it has reported six straight quarters of losses.
By taking a stake, Washington signals that Intel is “too big to fail.” Analysts see it as a clear attempt to secure domestic semiconductor production amid a broader technology rivalry with China. SoftBank’s recent $2 billion investment in Intel adds a further vote of confidence.
The Catch: Customers, Not Capital
But critics argue the deal does little to fix Intel’s core problems. As Reuters put it in its analysis “Did Trump save Intel? Not really”, the company desperately needs external customers for its 14A and 18A nodes to make its foundry arm viable. Without reliable demand, fresh funding will only prolong the struggle.
“Intel must secure enough customers’ volume to go to production… government money alone won’t change that,” said Kinngai Chan of Summit Insights.
Yields remain a key challenge: unlike TSMC, which absorbs early inefficiencies when working with partners like Apple, Intel’s financial losses make it harder to weather missteps.
The Washington Post calls the deal “a mistake,” arguing that mimicking China’s industrial strategy risks political interference, market distortion, and may fail to address Intel’s core inefficiencies.
The editorial also suggests alternatives like “friend-shoring” supply chains and infrastructure improvements rather than direct equity stakes.
Key Facts at a Glance
| Detail | Info |
|---|---|
| Stake size & source | 9.9% equity via $11.1B in grants (CHIPS + Secure Enclave) |
| Stock terms | 433.3M non-voting shares at $20.47 each (17% discount) |
| Governance | Passive stake—no board seats, alignment with board on votes |
| Additional clause | 5% warrant over 5 years if foundry ownership falls below 51% |
Trump’s equity grab does more than inject capital—it reshapes the U.S. approach to strategic industries. But Intel’s revival will require more than funding; it needs customers, technological competitiveness, and internal discipline. As critics caution, this move risks precedent for politicized corporate policy.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
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