In a bold move, the Trump administration announced on Friday that it has acquired a 10% stake in Intel, signaling a significant federal intervention in the private sector amid ongoing competition with China in the artificial intelligence realm.
The United States will not seek direct representation on Intel’s board but has committed to voting with the current Board of Directors on shareholder matters, with a few exceptions, as detailed in a joint statement released by the Trump administration and Intel.
President Donald Trump shared the news on his Truth Social platform, expressing enthusiasm for the deal and praising the leadership of Intel’s CEO. Just weeks prior, Trump had called for the CEO’s resignation over alleged ties to China.
“It is my Great Honor to report that the United States of America now fully owns and controls 10% of INTEL, a Great American Company that has an even more incredible future,” Trump wrote.
He emphasized the significance of the deal, stating, “I negotiated this Deal with Lip-Bu Tan, the Highly Respected Chief Executive Officer of the Company. The United States paid nothing for these Shares, and the Shares are now valued at approximately $11 Billion Dollars. This is a great Deal for America and, also, a great Deal for INTEL. Building leading edge Semiconductors and Chips, which is what INTEL does, is fundamental to the future of our Nation.”
Unlike temporary government stakes witnessed during the 2008-2009 financial crisis, this acquisition stands out as the U.S. economy currently remains stable. A 2003 Congressional study previously indicated that federal investments in public companies could involve significant risks alongside potential benefits, cautioning against such moves.
The funding for this stake will derive from $5.7 billion in grants previously awarded to Intel under the 2022 U.S. CHIPS and Science Act, alongside an additional $3.2 billion given as part of the Secure Enclave program, a once-classified initiative advocating for semiconductor security.
Combining these figures, Intel’s total investment from the U.S. amounts to approximately $11.1 billion, equating to nearly 10% of the company’s value. Currently, Intel is valued at around $108 billion in the stock market.
This latest action by Trump reflects a continuation of his significant departures from traditional norms regarding government-business relationships, challenging the free-market principles typically upheld by both major U.S. political parties.
Earlier this month, Trump also exerted influence over leading chipmakers such as Nvidia and AMD, convincing them to remit 15% of their revenues from certain sales to China in exchange for securing export licenses.
As companies like Intel navigate the competitive landscape, it has faced challenges, experiencing a substantial decline of about 60% in its share value since the pandemic’s peak.
The strategic focus on Intel is motivated by the ongoing artificial intelligence arms race and the importance of semiconductor production as a matter of national security, prompting Trump officials to prioritize investment in this critical sector.
In a related development, Japan’s SoftBank announced a $2 billion investment in Intel, aiming to enhance its commitment to advanced technology and semiconductor innovation in the United States.
Interestingly, the announcement of the federal stake has garnered some bipartisan support. U.S. Senator Mark Warner, a Democrat from Virginia, expressed cautious optimism regarding the move, emphasizing the importance of U.S. leadership for both economic growth and national security.
Warner stated, “Taking an equity stake in Intel may or may not be the right approach, but one thing is clear: allowing cutting-edge chips to flow to China without restraint will erode the value of any investment we make here at home. We need a strategy that protects American innovation, strengthens our workforce, and keeps the technologies of the future firmly in American hands.”
As the United States continues to grapple with its competitive stance against China, this strategic stake in Intel reflects a broader aim to bolster national security through control over critical technology sectors.
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