President Donald Trump has announced a deal giving the US government an equity stake of almost 10 per cent in struggling chipmaker Intel, in a bid to revive the company and boost the domestic chip manufacturing industry.
The US government will buy a 9.9 per cent stake for an investment of $8.9 billion, or $20.47 per share, in Intel common stock, the company said in a statement on Friday.
The government’s purchase of 433.3 million primary shares will be funded by the remaining $5.7 billion in grants previously awarded, but not yet paid, to Intel under the US Chips and Science Act, and $3.2 billion awarded as part of the Secure Enclave programme. Both these grants were awarded under Mr Trump's predecessor, Democratic President Joe Biden.
“As the only semiconductor company that does leading-edge logic R&D and manufacturing in the US, Intel is deeply committed to ensuring the world’s most advanced technologies are American-made,” Lip-Bu Tan, chief executive of Intel, said. “President Trump’s focus on US chip manufacturing is driving historic investments in a vital industry that is integral to the country’s economic and national security.”
The government backing gives Intel, which has faced challenges in attracting customers to its new factories, some scope to revive its loss-making foundry business.
Mr Tan took the helm in March and was tasked with turning around the company, which recorded an annual loss of $18.8 billion in 2024 – its first such loss since 1986.
The deal improves the relationship between Mr Trump and Mr Tan, after the President recently said the chief executive should step down due to conflicts of interest. The President had earlier demanded that Mr Tan resign over his ties to Chinese firms.
“The United States of America now fully owns and controls 10 per cent of Intel, a great American company that has an even more incredible future,” Mr Trump said in a post on Truth Social. “I negotiated this deal with Lip-Bu Tan, the highly respected chief executive officer of the company … This is a great deal for America and, also, a great deal for Intel.
“Building leading-edge semiconductors and chips, which is what Intel does, is fundamental to the future of our nation.”
The US government's $8.9 billion investment is in addition to the $2.2 billion in Chips Act grants Intel has received, making a total investment of $11.1 billion, the company said.
The US government’s investment will be a passive ownership, with no board representation or other governance or information rights, Intel said. The government also agreed to vote with the company’s board of directors on matters requiring shareholder approval, with limited exceptions.
“As more companies look to invest in America, this administration remains committed to reinforcing our country’s dominance in artificial intelligence while strengthening our national security,” US Commerce Secretary Howard Lutnick said.
The government will also receive a five-year warrant at $20 per share for an additional five per cent of Intel common shares, exercisable only if the company ceases to own at least 51 per cent of the foundry business.
California-based Intel touted the “significant expansion” of its domestic chipmaking capacity, investing more than $100 billion to expand its US sites.
The company’s newest chip fabrication site in Arizona is expected to begin high-volume production later this year, and has the most advanced semiconductor manufacturing process technology on US soil, it said.
Many leading technology companies support President Trump’s agenda to achieve US technology and manufacturing leadership, it said.
“Intel is deeply engaged with current and potential customers and partners who share its commitment to building a strong and resilient US semiconductor supply chain,” the company said.
Microsoft, Dell Technologies, HP and Amazon.com's AWS pledged support as part of the statement on Friday.
“The industry needs a strong and resilient US semiconductor industry, and no company is more important to this mission than Intel,” Michael Dell, chief executive of computer maker Dell, said in the statement.
