The Trump administration and Intel have reached an agreement for the U.S. government to own nearly 10 percent of the struggling chip maker, the president announced on Friday.
“The United States paid nothing for these Shares, and the Shares are now valued at approximately $11 Billion Dollars,” Trump wrote on Truth Social, claiming the agreement means the government “fully owns and controls” a major portion 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,” he added.
Funding for the $11.1 billion deal comes from $2.2 billion in funding Intel received under the 2022 CHIPS and Science Act, plus $5.7 billion from the act the company was awarded but has not received, as well as $3.2 in funds already awarded as part of the Secure Enclave national security program, the company announced on its website.
The stake is in the form of passive ownership and does not give the government board representation or other governance rights, Intel said, adding that the U.S. had an option to purchase further shares.
“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,” Intel CEO Lip-Bu Tan said in a statement. “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 deal marks a striking change in tone from the administration, as well as the most consequential government investment in a single U.S. company since the multi-billion-dollar auto bailout of GM and Chrysler during the 2008 financial crisis.
Earlier this month, Trump called on Tan to resign, accusing the CEO of being “highly conflicted” because of his past work and investments in the Chinese tech sector.
The administration said the deal sprang from negotiations last week with the Intel boss, who “walked in wanting to keep his job, and he ended up giving us $10 billion for the United States,” Trump said at a news conference.
A framework for the deal between Commerce Secretary Howard Lutnick and Intel finance chief David Zinsner was solidified on Wednesday, The New York Times reports.
Following the announcement of the deal, Lutnick praised the agreement “as fair to Intel and fair to the American People,” posting a photo on X of himself with Tan.
“This historic agreement strengthens U.S. leadership in semiconductors, which will both grow our economy and help secure America’s technological edge,” Lutnick wrote.
The deal could face legal challenges from shareholders, and some experts say it’s unclear if the CHIPS Act funds can legally be turned into equity.
Some observers were also unsure if a government investment would turn things around for Intel, a pioneering Silicon Valley chip maker that has struggled in recent years as competitors like Nvidia outpaced it on key innovations like chips for artificial intelligence.
“The questions I have are first, what are the guardrails to ensure that a government stake doesn’t result in unhelpful political influence on the company, and, second, how exactly a government stake will facilitate the financial turnaround,” economic historian Chris Miller told The Washington Post.
Intel shares were up more than 5.5 percent as of Friday afternoon.
The Trump administration previously sharply criticized the Biden-era CHIPS Act for awarding billions to revive the U.S. semiconductor industry, which makes key components for computers and numerous other devices with digital components, arguing the act was a giveaway to companies that didn’t result in enough benefit to the American people.
The White House, which has also negotiated “golden share”-style government influence over Nippon Steel’s investment in U.S. Steel, has shown particular interest in putting Trump’s mark on the semiconductor industry, which has largely moved to Asia in recent decades.
Trump said this month he plans to put a 100 percent tariff on computer chips unless companies build in the U.S., and the administration agreed to a deal to receive 15 percent of Nvidia and AMD’s revenues from the sale of the companies’ chips in China.
