The U.S. government has acquired an unprecedented 10% stake in Intel and is planning more such moves, according to a deal struggling chipmakers. Donald Trump Commerce Secretary Howard Lutnick is the latest extraordinary intervention by the White House American company.
Lutnick wrote on X: “Big News: United States of America now has 10% Intelone of our great American technology companies. Thanks to Intel CEO @lipbutan1 for reaching a deal that is fair to Intel and fair to the American people. ”
Trump met with tan lips on Friday and took a photo with Lutnick. The development comes after a meeting between Tan and Trump earlier this month, amid the demand for the Intel chief’s resignation from his ties to Chinese companies.
“He walked in and kept the job and ended up giving the United States $10 billion. So we got $10 billion in revenue,” Trump said Friday.
Although Trump did not provide $1 billion in details, under the Chips and Science Act, equity equals the amount Intel will receive government grants to help fund the U.S. chips factory building in the U.S.
Intel Investment Will Be the Latest of Several Unusual Trades Trump administration Together with U.S. companies, including agreeing to allow AI chip giant NVIDIA to sell its H20 chips to China in exchange for the U.S. government to acquire 15% of sales. Chip maker AMD reached a similar deal.
The Pentagon also plans to become the largest shareholder in a small mining company to promote the output of rare earth magnets, while the U.S. government has made a “gold share” for itself with certain vetos as part of a deal that allows Nippon Steel to buy US Steel.
The widespread U.S. government intervention in corporate affairs has led critics to say Trump’s actions have created new corporate risk categories.
Trump’s move comes after Softbank Group made a $20 billion capital injection, a major vote of confidence in troubled U.S. chipmakers. Daniel Morgan, senior portfolio manager at Synovus Trust, said Intel’s problems are beyond SoftBank or the government’s equity cash input.
“Without the support of the government or other financially strong partners, it will be difficult for Intel Foundry to raise enough capital to continue building more factories at a reasonable rate,” he added. [Taiwan Semiconductor Manufacturing Company] Attract business from a technical perspective”.
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A stake with a current share price of 10% will be worth about $10 billion. Lutnick said no stake will be voted this week, meaning it won’t let the U.S. government tell companies how to run their business.
Analysts say federal support could provide Intel with more breathing space to restore its loss casting business, but it still has a weak product roadmap and challenges to attract customers to its new plant.
Tan, who held the top position at Intel in March, is tasked with turning the American chip manufacturing icon, with the icon’s annual loss of $18.8 billion in 2024, the first loss since 1986.
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