U.S. Government Acquires 9.9% Stake in Intel to Boost Domestic Chip Manufacturing

In August 2025, the United States government acquired a 9.9% equity stake in Intel Corporation through an $8.9 billion investment. This move, funded by $5.7 billion from the CHIPS and Science Act and $3.2 billion from the Secure Enclave program, aims to bolster domestic semiconductor manufacturing and reduce reliance on foreign supply chains.

The CHIPS and Science Act, enacted in August 2022, allocated approximately $52.7 billion to enhance domestic semiconductor research and manufacturing. This includes $39 billion in subsidies for chip manufacturing and $13 billion for research and workforce training, with the goal of strengthening American supply chain resilience and countering technological advancements by other nations. The Secure Enclave program, part of the CHIPS Act, is designed to expand the trusted manufacturing of leading-edge semiconductors for the U.S. government.

Intel has faced financial challenges since 2024, including a significant drop in share prices from highs of $70 in 2020 to under $24. The company's market share in the x86 processor market declined from 90% to 68.4% as of 2023, indicating increased competition from companies like AMD.

The government's acquisition of a stake in Intel has sparked significant political debate. Critics, including Republican Senators Rand Paul and Thom Tillis, argue that this move contradicts free-market principles and liken it to economic models in China and the former Soviet Union. Former Vice President Mike Pence also expressed concerns, stating, "State-owned enterprise is not the American way."

President Trump defended the investment, stating it was a strategic move to enhance national security and technological self-sufficiency, particularly in semiconductor manufacturing. He also suggested that similar deals with other companies, such as defense contractors, might follow.

Investors have expressed concerns that this move signals increased federal intervention in private industry, potentially leading to a shift toward industrial policy reminiscent of European and Asian models. Analysts warn that such interventions could distort market competition and prioritize political gains over business innovation.

This level of government intervention in a private corporation is unprecedented in recent U.S. history. While the government has previously provided subsidies and grants to industries, acquiring a significant equity stake marks a new approach. Comparisons have been made to past government bailouts, such as that of General Motors, but the direct equity stake in Intel represents a more direct involvement in corporate governance.

The U.S. government's investment in Intel Corporation reflects a strategic effort to strengthen domestic semiconductor manufacturing and reduce dependence on foreign supply chains. While it has ignited political debate and raised concerns among investors, the move underscores the administration's commitment to enhancing national security and technological self-sufficiency.