The White House announced on Friday that the U.S. federal government will acquire a 10% equity stake in chipmaker Intel, marking one of the most significant government interventions in the semiconductor sector in decades, BBC reported.
U.S. Secretary of Commerce Howard Lutnick confirmed the agreement in a statement on X, describing it as a step that will “strengthen U.S. leadership in semiconductors, grow our economy, and help secure America’s technological edge.” Lutnick’s post was accompanied by a photograph of himself alongside Intel Chief Executive Officer Lip-Bu Tan.
President Donald Trump first disclosed the deal earlier in the day during remarks in the Oval Office, calling it a “great deal for them.” Following the announcement, shares of the Santa Clara–based company rose more than 5% on Wall Street.
Intel said the government’s investment—valued at $8.9 billion (£6.6bn)—would be made in common stock. The funds will be drawn from previously approved grants that had not yet been disbursed, including allocations from the CHIPS and Science Act passed under President Joe Biden’s administration.
An Unconventional Approach
White House Press Secretary Karoline Leavitt praised the plan earlier in the week as “a creative idea that’s never been done before.” The move follows the Trump administration’s recent order requiring Nvidia and AMD to allocate 15% of revenue from AI chip sales to China to the federal government.
While the equity stake is unusual, analysts note that it aligns with broader efforts to secure America’s semiconductor supply chain. Jacob Feldgoise, Senior Data Research Analyst at Georgetown University’s Center for Security and Emerging Technology, told the BBC that the decision reflects “a more direct role in private markets to advance U.S. economic and national security objectives, particularly around maintaining—if not regaining—technological leadership.”
Government interventions of this kind are rare but not unprecedented. During the 2008 financial crisis, Washington took a majority stake in General Motors to prevent bankruptcy, though it ultimately sold its position at a loss of about $10 billion. More recently, the Trump administration applied a similar strategy with MP Materials, a Nevada-based rare earth mining company, a deal that later drew scrutiny over the Department of Defense’s use of Cold War-era laws to bypass procurement rules.
Intel at a Crossroads
Intel has faced mounting challenges over the past decade. Once a dominant force in global chipmaking, the company has struggled to expand production capacity and has fallen behind competitors in critical markets such as mobile and artificial intelligence, where Nvidia has surged to a market capitalization above $4 trillion. By comparison, Intel’s valuation has hovered near $100 billion.
“As the only semiconductor company that conducts 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,” CEO Lip-Bu Tan said in a statement. He praised the administration’s efforts, adding that “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.”
The CHIPS and Science Act, signed into law in 2022, was designed to reshore chip manufacturing and reduce U.S. reliance on foreign supply chains. Friday’s agreement marks a more direct form of government participation in that effort.
Political Tensions
The deal also comes against the backdrop of strained relations between Intel and the Trump administration. Earlier this month, President Trump publicly called for Mr. Tan’s resignation, citing alleged ties to Chinese companies linked to Beijing’s military. Republican Senator Tom Cotton raised similar concerns in a letter to Intel’s board, questioning the company’s ability to safeguard taxpayer investments and comply with security regulations.
Mr. Tan, a U.S. citizen born in Malaysia and raised in Singapore, rejected the accusations as “misinformation” in a message to Intel staff, emphasizing his adherence to “the highest legal and ethical standards.” He met with President Trump at the White House following the criticism.
Despite the controversy, Friday’s announcement underscores the administration’s determination to bolster domestic semiconductor production and reassert U.S. leadership in an industry central to both economic competitiveness and national security.
