U.S. Government Acquires 9.9% Stake in Intel for $8.9 Billion
On August 22, 2025, the United States government announced the acquisition of a 9.9% equity stake in Intel Corporation through an $8.9 billion investment. This strategic move aims to bolster domestic semiconductor manufacturing and reduce reliance on foreign supply chains.
The investment was facilitated by converting $5.7 billion in previously awarded but unpaid grants under the CHIPS and Science Act, along with $3.2 billion from the Secure Enclave program, into common stock. The government purchased 433.3 million Intel shares at $20.47 each, below the current market price. The ownership is passive, with no board representation or special governance rights, and the government will generally vote in line with Intel’s board on matters requiring shareholder approval. Additionally, the agreement includes a five-year warrant for the government to purchase an additional 5% of Intel shares at $20 each, exercisable only if Intel’s ownership of its foundry business falls below 51%.
The CHIPS and Science Act, enacted on August 9, 2022, authorized approximately $280 billion in funding to boost domestic research and manufacturing of semiconductors in the United States. This included $52.7 billion specifically allocated for semiconductor manufacturing and research. The Secure Enclave program, announced on September 16, 2024, awarded Intel up to $3 billion in direct funding under the CHIPS and Science Act. The program aims to expand the trusted manufacturing of leading-edge semiconductors for the U.S. government, building on previous projects between Intel and the Department of Defense.
Intel, founded in 1968, is a leading American multinational corporation and technology company headquartered in Santa Clara, California. It is renowned for designing and manufacturing semiconductor products, including microprocessors and integrated circuits. As the only American company that both designs and manufactures leading-edge logic chips, Intel plays a critical role in the domestic semiconductor industry. In recent years, Intel has faced challenges in its manufacturing unit, reporting a $13 billion operating loss in 2024. Despite these challenges, the company has been investing heavily in expanding its U.S. manufacturing capacity, with over $100 billion committed to domestic chipmaking facilities.
Intel CEO Lip-Bu Tan expressed gratitude for the government's confidence, stating, "President Trump’s focus on U.S. chip manufacturing is driving historic investments in a vital industry that is integral to the country’s economic and national security." U.S. Secretary of Commerce Howard Lutnick remarked, "Intel is excited to welcome the United States of America as a shareholder, helping to create the most advanced chips in the world."
The government’s investment in Intel signifies a significant shift in U.S. industrial policy, indicating increased government intervention in private industry to bolster domestic semiconductor manufacturing and reduce reliance on foreign supply chains. This move has raised concerns among investors about potential political influence on corporate governance and the precedent it sets for future government involvement in private enterprises. Fitch Ratings noted that while the deal boosts Intel’s liquidity, it does not improve its credit rating or enhance fundamental market demand. Investor concerns include dilution of existing shareholders' voting rights, increased regulatory risk, and potential conflicts between national and corporate interests. Additionally, the government’s stake in Intel may lead to more restrictive export policies, impacting semiconductor firms with significant exposure to international markets, particularly China.
Other semiconductor companies have responded differently to government funding initiatives. For instance, GlobalFoundries confirmed that its participation in the CHIPS Act funding program does not involve any equity stake, with funds received based solely on milestone completions. Treasury Secretary Scott Bessent stated that the government is not considering acquiring a stake in Nvidia, indicating that such moves are not currently under discussion for all semiconductor companies.
The U.S. government's acquisition of a stake in Intel represents a significant shift in industrial policy, reflecting a proactive approach to securing domestic semiconductor manufacturing capabilities. While this move aims to strengthen national security and technological sovereignty, it also raises questions about the extent of government involvement in private industry and its long-term implications for the market.
U.S. Government's Stake in Intel Sparks Debate:
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