Trump Administration Considers 10% Stake in Intel Using CHIPS Act Grants
Washington, D.C., August 19, 2025 – The Trump administration is reportedly in discussions to acquire a 10% equity stake in Intel Corporation, potentially making the U.S. government the chipmaker’s largest shareholder, according to sources familiar with the matter. This move, which could involve converting up to $10.9 billion in grants from the U.S. CHIPS and Science Act into equity, marks a significant shift in federal industrial policy aimed at bolstering domestic semiconductor manufacturing and addressing national security concerns.
Intel, a cornerstone of U.S. chipmaking, has faced significant challenges, including a $2.9 billion net loss in Q2 2025, struggles to compete in the AI chip boom, and delays in its Ohio factory hub, once touted as the world’s largest chipmaking facility. The proposed investment, valued at approximately $10.5 billion based on Intel’s current market value, aims to stabilize the company and reinforce its role in reducing U.S. reliance on foreign semiconductor production.
Details of the Potential Deal
The CHIPS and Science Act, passed in 2022 with bipartisan support, allocated $39 billion in grants to revitalize American semiconductor manufacturing. Intel has been the largest recipient, securing $10.9 billion for commercial and military production, including $7.9 billion for commercial manufacturing and $3 billion for national security projects. The Trump administration is exploring converting some or all of these grants into an equity stake, a departure from the original plan of disbursing funds over time as Intel meets project milestones. As of January 2025, Intel had received $2.2 billion in disbursements, with additional tranches tied to progress.
The discussions, first reported by Bloomberg, remain in early stages, and the exact size of the stake is still in flux. White House spokesman Kush Desai declined to comment on specifics, stating that no deal is official until announced, while Intel has not responded to requests for comment. The proposal would likely require approval from Intel’s board and could face legal challenges from shareholders or industry groups concerned about government intervention in private industry.
Strategic and Political Context
The potential investment aligns with the Trump administration’s aggressive approach to securing strategic industries. Recent moves include securing a “golden share” in U.S. Steel to approve its sale to Japan’s Nippon Steel and negotiating a 15% revenue share from Nvidia and AMD’s AI chip sales to China. The Intel stake would further this trend, positioning the government as a key player in the chipmaker’s future and signaling a shift toward direct industrial policy.
Intel’s struggles have raised national security concerns, as semiconductors power everything from consumer electronics to defense systems. The company’s lag behind competitors like Taiwan’s TSMC and South Korea’s Samsung, coupled with its failure to capture significant AI market share, has made government intervention a priority for both the Trump and Biden administrations. Former Intel CEO Craig Barrett recently told Fortune that Intel requires a $40 billion cash infusion to compete with TSMC, a sum far exceeding CHIPS Act grants.
The talks follow a high-profile meeting between President Trump and Intel CEO Lip-Bu Tan, who faced criticism from Trump over alleged ties to Chinese firms. Despite earlier calls for Tan’s resignation, Trump praised him post-meeting, indicating a thaw in tensions. Tan, appointed in March 2025, is focusing on cost-cutting and job reductions to stabilize Intel, but analysts question whether a government stake will address deeper technological and market challenges.
Market and Industry Reactions
Intel’s stock surged 23% last week—the best weekly gain since February—following initial reports of government investment, reflecting investor optimism about federal support. However, shares dipped 3.7% on Monday after Bloomberg detailed the potential stake size, suggesting market uncertainty about the deal’s implications. A separate $2 billion investment from SoftBank, announced Monday, provided a vote of confidence, boosting shares further.
Analysts are divided. Some, like Patrick Moorhead of Moor Insights & Strategy, argue that a government stake aligns with national security priorities, given Intel’s role as the only U.S. company positioned to produce leading-edge chips domestically. Others, like those on X, express skepticism, calling it a bailout that risks distorting markets. One user remarked, “This is crony capitalism, not a solution to Intel’s deeper issues.” Critics also note that converting grants to equity may not provide Intel with additional capital, merely accelerating existing funds.
Broader Implications
The administration has floated converting other CHIPS Act grants into equity stakes, though it’s unclear if this approach will extend to companies like TSMC or Samsung, also expanding U.S. operations with CHIPS Act support. Such moves could redefine government-industry relations, echoing interventions like the 2008-2009 auto and banking bailouts. However, concerns persist about the legality and long-term impact of government ownership in private firms, with some analysts warning of potential shareholder backlash or inefficiencies.
As discussions continue, the outcome will shape Intel’s future and U.S. semiconductor strategy. The deal could accelerate Intel’s Ohio factory and other projects, but whether it will restore the company’s technological edge remains uncertain. For now, the Trump administration’s bold approach underscores its commitment to securing domestic chip production, even as it navigates complex economic and political terrain.
Sources: Bloomberg, CNBC, The New York Times, Reuters, Fortune, Tom’s Hardware, The Verge, MarketScreener, The Independent, Yahoo Finance