President Donald Trump has announced that the US government will acquire a 10 percent stake in chipmaker Intel. Trump shared the news below a press conference on FridayWhile an official announcement is still awaited, Reuters Information. News of a plan to convert Intel’s previously committed funding under the CHIPS Act into company stock was first reported in early August.
Behind the deal appears to be a meeting between Intel CEO Lip-Bu Tan and Trump, following the president’s request for Tan to resign. “He came in wanting to keep his job, and he ended up giving us $10 billion for the United States. So we got $10 billion,” Trump said at the news conference.
Intel later announced more details about the investment. the company said in a press release that the government will invest “$8.9 billion in Intel common stock.” It adds that the capital investment will be funded by $5.7 billion previously earmarked for Intel under the CHIPS Act and $3.2 billion from the Secure Enclave program. Intel previously received $2.2 billion in CHIPS grants, bringing the chipmaker’s total government spending to $11.1 billion. The state paid $20.47 per share, making the $8.9 billion investment equivalent to a 9.9% stake in the company.
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It is important to note that a government investment in Intel is not the same as getting free money, but rather the opposite. Even if previous comments US Commerce Secretary Howard Lutnick proposed that ownership should not have voting rights, but that common stock should have voting rights. However, Intel notes that the investment will be passive and without board representation, and that the government has agreed to vote with the board “on matters requiring shareholder approval, with limited exceptions.”
Intel should accommodate to $10.86 billion received federal funds under the CHIPS Act to expand its chip manufacturing operations in the United States. By agreeing to this deal, Tan is likely trying to secure continued funding, one of several drastic measures aimed at keeping Intel afloat. Tan took over as CEO after Pat Gelsinger suddenly retired in 2024. Since taking over, he has already committed to reducing Intel’s workforce by 20%. Despite lower costs and guaranteed investment, the company’s future remains uncertain: Intel would struggle to mass-produce next-generation Panther Lake chips.
The Trump administration has said it will not enter into similar participation agreements with other recipients of CHIPS Act funds. However, that has not stopped them from entering into other unprecedented financial agreements. NVIDIA and AMD have reportedly reached an agreement with the US government that will allow them to export products to China in exchange for 15% of their profits.
Update, August 22, 6:20 PM Eastern Time: This article was updated after publication with additional information about the Intel deal and the headline was changed to the dollar amount instead of the “10%” amount mentioned above. A paragraph in which U.S. Commerce Secretary Howard Lutnick quoted the stock as having no voting rights was also changed to reflect the final details of the deal.