Trump turns $11.1B in US government funds into a 10% stake in
downtrodden Intel
[August 23, 2025] By
MICHELLE L. PRICE and MICHAEL LIEDTKE
WASHINGTON (AP) — President Donald Trump on Friday announced the U.S.
government has secured a 10% stake in struggling Silicon Valley pioneer
Intel in a deal that was completed just a couple weeks after he was
depicting the company's CEO as a conflicted leader unfit for the job.
“The United States of America now fully owns and controls 10% of INTEL,
a Great American Company that has an even more incredible future,” Trump
wrote in a post.
The U.S. government is getting the stake through the conversion of $11.1
billion in previously issued funds and pledges. All told, the government
is getting 433.3 million shares of non-voting stock priced at $20.47
apiece — a discount from Friday's closing price at $24.80. That spread
means the U.S. government already has a gain of $1.9 billion, on paper.
The remarkable turn of events makes the U.S. government one of Intel's
largest shareholders at a time that the Santa Clara, California, company
is i n the process of jettisoning more than 20,000 workers as part of
its latest attempt to bounce back from years of missteps taken under a
variety of CEOs.
Intel's current CEO, Lip-Bu Tan, has only been on the job for slightly
more than five months, an d earlier this month, it looked like he might
be on shaky ground already after some lawmakers raised national security
concerns about his past investments in Chinese companies while he was a
venture capitalist. Trump latched on to those concerns in an August 7
post demanding that Tan resign.
But Trump backed off after the Malaysian-born Tan professed his
allegiance to the U.S. in a public letter to Intel employees and went to
the White House to meet with the president, leading to a deal that now
has the U.S. government betting that the company is on the comeback
trail after losing more than $22 billion since the end of 2023. Trump
hailed Tan as “highly respected” CEO in his Friday post.
In a statement, Tan applauded Trump for “driving historic investments in
a vital industry” and resolved to reward his faith in Intel. “We are
grateful for the confidence the President and the Administration have
placed in Intel, and we look forward to working to advance U.S.
technology and manufacturing leadership,” Tan said.
Intel's current stock price is just slightly above where it was when Tan
was hired in March and more than 60% below its peak of about $75 reached
25 years ago when its chips were still dominating the personal computer
boom before being undercut by a shift to smartphones a few years later.
The company's market value currently stands at about $108 billion - a
fraction of the current chip kingpin, Nvidia, which is valued at $4.3
trillion.
The stake is coming primarily through U.S. government grants to Intel
through the CHIPS and Science Act that was started under President Joe
Biden's administration as a way to foster more domestic manufacturing of
computer chips to lessen the dependence on overseas factories.
But the Trump administration, which has regularly pilloried the policies
of the Biden administration, saw the CHIPs act as a needless giveaway
and is now hoping to make a profit off the funding that had been pledged
to Intel.
"We think America should get the benefit of the bargain,” U.S. Commerce
Secretary Howard Lutnick said earlier this week. “It’s obvious that it’s
the right move to make.”
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 About $7.8 billion had been been
pledged to Intel under the incentives program, but only $2.2 billion
had been funded so far. Another $3.2 billion of the government
investment is coming through the funds from another program called
“Secure Enclave.”
Although U.S. government can't vote with its shares
and won't have a seat on Intel's board of directors, critics of the
deal view it as a troubling cross-pollination between the public and
private sectors that could hurt the tech industry in a variety of
ways.
For instance, more tech companies may feel pressured to buy
potentially inferior chips from Intel to curry favor with Trump at a
time that he is already waging a trade war that threatens to affect
their products in a potential scenario cited by Scott Lincicome,
vice president of general economics for the Cato Institute.
“Overall, it’s a horrendous move that will have real harms for U.S.
companies, U.S. tech leadership, and the U.S. economy overall,”
Lincicome posted Friday.
The 10% stake could also intensify the pressure already facing Tan,
especially if Trump starts fixating on Intel's stock price while
resorting to his penchant for celebrating his past successes in
business.
Nancy Tengler, CEO of money manager Laffer Tengler Investments, is
among the investors who abandoned Intel years ago because of all the
challenges facing Intel.
“I don’t see the benefit to the American taxpayer, nor do I see the
benefit, necessarily to the chip industry,” Tengler said while also
raising worries about Trump meddling in Intel's business.
“I don’t care how good of businessman you are, give it to the
private sector and let people like me be the critic and let the
government get to the business of government.,” Tengler said.
Although rare, it’s not unprecedented for the U.S. government to
become a significant shareholder in a prominent company. One of the
most notable instances occurred during the Great Recession in 2008
when the government injected nearly $50 billion into General Motors
in return for a roughly 60% stake in the automaker at a time it was
on the verge of bankruptcy. The government ended up with a roughly
$10 billion loss after it sold its stock in GM.
The U.S. government's stake in Intel coincides with Trump's push to
bring production to the U.S., which has been a focal point of the
trade war that he has been waging throughout the world. By lessening
the country’s dependence on chips manufactured overseas, the
president believes the U.S. will be better positioned to maintain
its technological lead on China in the race to create artificial
intelligence.
Even before gaining the 10% stake in Intel, Trump had been
leveraging his power to reprogram the operations of major computer
chip companies. The administration is requiring Nvidia and Advanced
Micro Devices, two companies whose chips are powering the AI craze,
to pay a 15% commission on their sales of chips in China in exchange
for export licenses.
—-
Liedtke reported from San Ramon, California.
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