US acquires 10% stake in Intel under Trump's new approach to chip strategy

The move marks rare government intervention in the private sector to boost domestic manufacturing of semiconductors

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US President Donald Trump signed a deal with Intel Corporation to acquire a 10 per cent stake, part of an effort to revive the struggling chipmaker and strengthen domestic semiconductor production.

 

The deal, finalised on Friday, gives Washington 433.3 million Intel shares, equal to 9.9 per cent of the company’s fully diluted common stock. Intel confirmed that the $8.9 billion transaction will be funded by pending grants under the US Chips and Science Act and the Secure Enclave programme.

 

Together with an earlier funding of $2.2 billion, the total government backing for Intel now stands at $11.1 billion. Despite its size, the investment comes with no board representation or governance rights, making the US a passive shareholder.

 

US Secretary of Commerce, Howard Lutnick made the announcement through a post on X.

 

“We are grateful for the confidence the president and the administration have placed in Intel, and we look forward to working to advance US technology and manufacturing leadership,” Intel Chief Executive Officer Lip-Bu Tan said in the statement.

Trump hails ‘great deal’ for America

Calling it a “great deal for America and Intel,” President Trump said semiconductor manufacturing was critical to the nation’s future. “Building leading-edge chips is fundamental to our country,” he said in a social media post. 

Why the move matters

The partial ownership marks one of the most direct interventions in a US corporate giant outside times of war or financial crisis. The White House has described semiconductor production as a matter of national security, pointing to recent supply shortages that disrupted industries worldwide.

 

Intel remains among the few American companies with the ability to produce chips on a large scale domestically. The government hopes the investment will help restore the company’s competitiveness against Asian rivals.

A new use of Chips Act funds

The deal represents a shift in how Trump is applying the Chips Act, a law signed earlier under the Biden administration. While the act was originally structured to provide subsidies, Trump has argued that taxpayers should receive a return on such large investments.

 

Commerce Secretary Howard Lutnick, who helped finalise the agreement, said the administration wanted to secure more tangible benefits for the US economy rather than simply giving away grants. 

Industry reaction and risks

Intel CEO Lip-Bu Tan welcomed the deal, saying the company was committed to expanding its US manufacturing base, including new factories in Arizona. Several major technology firms, including Microsoft, Dell, HP and Amazon Web Services, also expressed support for strengthening America’s chip supply chain.

 

Analysts, as reported by Bloomberg, warned that money alone might not solve Intel’s long-standing challenges. “Besides funding, Intel needs more customers,” noted Bernstein analyst Stacy Rasgon. Without stronger demand, he added, even a government-backed expansion could struggle to pay off.

A broader strategy of state involvement

The Intel deal is not the only example of Trump’s more hands-on economic policy. In recent months, his administration has pursued unconventional arrangements with other companies, including revenue-sharing agreements with chipmakers Nvidia and AMD and a “golden share” in Nippon Steel’s US operations.