US Government Acquires 9.9% Stake in Intel to Bolster Domestic Chip Manufacturing

In August 2025, the United States government acquired a 9.9% equity stake in Intel Corporation by purchasing 433.3 million shares at $20.47 each, totaling approximately $8.9 billion. This investment was funded through the conversion of $5.7 billion in CHIPS Act grants and $3.2 billion from the Secure Enclave program. The government's ownership is structured as passive, with no board representation or governance rights. Additionally, the agreement includes a five-year warrant allowing the government to purchase an additional 5% stake at $20 per share if Intel's ownership of its foundry business falls below 51%.

Intel, headquartered in Santa Clara, California, has faced significant financial challenges in recent years. In 2024, the company reported a net loss of $18.8 billion, a stark contrast to its $1.69 billion net income in 2023. Revenue declined by 2% year-over-year to $53.1 billion. The company's operating income also plunged to a loss of $11.68 billion, reflecting ongoing struggles in a competitive semiconductor market.

The government's investment aims to stabilize Intel's operations and bolster its competitiveness in the global semiconductor market. Intel CEO Lip-Bu Tan stated, "As the only semiconductor company that does leading-edge logic R&D and manufacturing in the U.S., Intel is deeply committed to ensuring the world’s most advanced technologies are American made."

This unprecedented move has sparked debate among policymakers and industry experts. Proponents argue it strengthens domestic semiconductor manufacturing and enhances national security. However, critics, including some Republican lawmakers, contend it represents government overreach and a departure from free-market principles. Former Vice President Mike Pence and Senators Thom Tillis and Rand Paul have criticized the move, likening it to economic models in China and the former Soviet Union.

The investment also includes a five-year warrant allowing the government to purchase an additional 5% stake at $20 per share if Intel's ownership of its foundry business falls below 51%. This clause aims to ensure that Intel maintains control over its manufacturing capabilities, which are considered vital for national security.

Intel has been investing heavily in expanding its U.S. manufacturing capacity, with over $100 billion allocated to broaden its domestic chipmaking capabilities. The company expects its new chip fabrication site in Arizona to commence high-volume production later in 2025.

This intervention marks a significant shift in U.S. industrial policy, with potential implications for corporate governance, market dynamics, and the balance between public and private sector roles in strategic industries. While the government's stake is passive, the move raises questions about future government involvement in private enterprises and the precedent it sets for other industries.

As the semiconductor industry continues to evolve, the impact of this investment on Intel's performance and the broader market remains to be seen. Stakeholders will be closely monitoring how this partnership influences Intel's strategic decisions and its ability to compete on the global stage.