TLDR
- U.S. government acquired 10% stake in Intel through $8.9 billion investment, purchasing 433.3 million shares at $20.47 per share
- Investment combines $5.7 billion from previously awarded CHIPS Act grants and $3.2 billion from secure chip program funds
- Intel stock rose 6% during Friday trading following the announcement
- Government paid below current market price for shares, with Trump claiming the stake is now worth approximately $11 billion
- SoftBank separately announced $2 billion investment in Intel earlier this week, taking roughly 2% stake
The U.S. government has officially taken a 10% equity stake in Intel Corporation, marking a major shift in American industrial policy. Commerce Secretary Howard Lutnick announced the deal on Friday following months of negotiations.
The government invested $8.9 billion to purchase 433.3 million Intel shares at $20.47 per share. This price represents a discount to the current market value, according to Intel’s official statement.
The funding structure splits between two sources. $5.7 billion comes from previously awarded CHIPS Act grants that had not yet been distributed. The remaining $3.2 billion derives from separate government programs focused on secure chip manufacturing.
President Trump celebrated the deal on Truth Social, writing that the United States “paid nothing for these Shares” and valued them at approximately $11 billion. He called it “a great Deal for America and, also, a great Deal for INTEL.”
Intel shares jumped about 6% during Friday’s regular trading session. The stock remained flat in after-hours trading following the official announcement.
Government Involvement Without Control
The agreement includes specific limitations on government influence. Intel confirmed that the U.S. government will not receive a board seat or other governance rights despite its substantial ownership position.
However, the deal includes future provisions. The government secured a warrant to purchase an additional 5% of Intel shares if the company loses majority control of its foundry business.
Intel CEO Lip-Bu Tan met with President Trump on Friday afternoon at the White House. Lutnick shared photos from the meeting on social media platforms.
Trump had indicated earlier Friday that the government deserved equity participation. “They’ve agreed to do it and I think it’s a great deal for them,” he told reporters at the White House.
This represents the latest example of increased government involvement in private enterprise under the Trump administration. Commerce Secretary Lutnick had previously stated the government should receive equity stakes in exchange for CHIPS Act funding.
Market Response and Additional Investment
The announcement came during a broader rally in technology stocks. Federal Reserve Chair Jerome Powell’s speech earlier Friday increased investor expectations for an interest rate cut next month.
Powell indicated that economic weakness might pose a bigger risk than inflation. His comments suggested the Fed could lower rates at its September meeting, boosting tech stock valuations across the board.
SoftBank had announced earlier this week that it would invest $2 billion in Intel. This separate investment gives the Japanese conglomerate approximately 2% ownership of the chipmaker.
Intel remains the only American company capable of manufacturing advanced semiconductors on U.S. soil. However, its technology lags behind Taiwan Semiconductor Manufacturing Company, which produces chips for Apple, Nvidia, and other major clients.
The company has been constructing new fabrication facilities in Ohio as part of its “Silicon Heartland” project. These factories aim to produce cutting-edge chips for artificial intelligence applications and other advanced computing needs.
Intel received nearly $8 billion in CHIPS Act grants last fall to fund its expansion plans. The legislation passed in 2022 under the Biden administration to strengthen domestic semiconductor manufacturing capabilities.
CEO Tan had announced in July that the company would slow Ohio factory construction due to market conditions. The facility is now scheduled to begin operations in 2030 rather than the originally planned timeline.
