U.S. Government Takes 10% Ownership in Intel

Post by : Monika

Photo: Reuters

The U.S. government has made a bold move by taking almost a 10% ownership stake in Intel, one of the most important technology companies in the country. President Donald Trump announced the decision, explaining that this step is not only about helping Intel but also about protecting the future of America’s technology industry.

Instead of giving Intel cash, the government turned previously promised grant money into shares of the company. The government now owns about 433 million shares of Intel, worth close to $9 billion. This makes the U.S. government the largest single shareholder in Intel, though it will not have voting rights in company decisions.

This unusual deal is being seen as one of Trump’s most important corporate moves since his return to the White House. It combines politics, business, and national security, showing how deeply connected technology has become with the future of America.

Why This Deal Matters

Chips, also known as semiconductors, are the small but powerful pieces that make modern technology work. They are found in computers, phones, cars, medical equipment, and even military devices. Without these chips, much of the world’s technology would stop working.

Intel, based in the United States, was once the clear leader in this industry. However, in the last decade, the company has struggled to keep up with rivals in Asia, such as Taiwan Semiconductor Manufacturing Company (TSMC) and South Korea’s Samsung. These companies are making faster and more efficient chips, especially for artificial intelligence (AI).

Intel’s weakness has worried many U.S. leaders. They fear that if too many chips are made overseas, America could lose control over a technology that is critical for the economy and national defense.

The U.S. government has already been investing in chip-making through the CHIPS Act, a law created to encourage American companies to build more factories and develop advanced technology at home. But this new deal with Intel takes things a step further—by directly buying part of the company.

How the Deal Was Structured

The U.S. government is using $8.9 billion in unpaid grants from the CHIPS Act and another program called Secure Enclave. Instead of handing the money to Intel, the government converted it into company shares.

Each share was bought at a price of $20.47, which was about $4 lower than Intel’s closing stock price on the day the deal was finalized. This gave the government a better price than private investors usually get.

With this purchase, the government now owns 9.9% of Intel’s total stock, making it the single largest shareholder. However, the government holds non-voting shares, meaning it will not take part in daily company decisions or board meetings.

The deal also includes a five-year option. If Intel’s main chip-making business drops below 51% ownership, the government can buy an extra 5% of shares. This option gives the government flexibility to protect U.S. interests if Intel’s control over its factories becomes weaker in the future.

Why the Government Stepped In

The path to this deal was not smooth. Just weeks earlier, President Trump had openly criticized Intel’s CEO, Pat Gelsinger. Trump even suggested that Gelsinger should resign because of Intel’s poor performance.

But things changed quickly after a private meeting between the two men. After their talk, Trump praised Gelsinger, calling him a strong leader who is important for America’s technology future.

By agreeing to this stake, Trump has shown that he believes Intel can still play a key role in America’s chip-making industry. The deal also sends a message to the world: the U.S. government is willing to directly back its companies if it means protecting national security and keeping advanced technology at home.

Market Reaction and Other Investments

After the announcement, Intel’s stock price rose more than 5%, showing that investors saw the deal as a positive sign for the company.

This news also came shortly after another major investment. Japan’s SoftBank, one of the biggest investment groups in the world, had already put $2 billion into Intel just days earlier. With two big backers—the U.S. government and SoftBank—Intel now has a stronger chance of competing with rivals and rebuilding its reputation.

Intel’s future plans include building more factories in the United States, creating advanced chips for AI, and strengthening partnerships with other American companies.

Mixed Reactions to the Move

Not everyone is happy with the government’s new role as a corporate shareholder. Some politicians and experts argue that the government should not interfere too much in private businesses. They say this could create problems, especially if other companies begin asking for similar deals.

Others, however, believe this is the right step. They argue that chip-making is not just another industry—it is the foundation of modern technology. If America loses its ability to make chips at home, the economy and the military could both face serious risks.

This debate shows the larger question the U.S. faces today: how much should the government step into the economy to protect critical industries?

Trump’s Broader Economic Strategy

This deal with Intel also fits into Trump’s larger economic plan. Since returning to the White House, Trump has been focused on reshaping America’s trade and industrial policies. He has often spoken about reducing dependence on foreign countries, especially China, for key resources and technologies.

By making the U.S. government Intel’s largest shareholder, Trump is signaling that he wants to bring more technology manufacturing back to American soil. This is not just about creating jobs—it is also about ensuring that the U.S. controls its own future in areas like artificial intelligence, defense technology, and advanced computing.

Trump has also suggested that more deals like this could happen in the future. If other important American companies face trouble, the government might step in again to take partial ownership.

What This Means for Intel’s Future

For Intel, this deal could be a turning point. With strong backing from the government and private investors, the company now has both money and political support.

However, Intel still faces big challenges. It must catch up to competitors in making advanced chips, especially those designed for AI. Building new factories and upgrading old ones will take years and billions of dollars.

The company also needs to win back trust from customers who have turned to other suppliers. For example, Apple and many AI companies rely on chips made in Taiwan and South Korea instead of Intel. Winning back those clients will not be easy.

Still, with the government’s support, Intel has a new chance to prove itself. If the company succeeds, it could once again become a symbol of American technological strength.

The Bigger Picture

This move highlights the growing importance of technology in global politics. Chips are no longer just products for computers and phones—they are now seen as a key part of national power.

Countries around the world are competing to control chip production. China is investing billions to grow its own industry. The European Union has launched its own version of the CHIPS Act. Japan and South Korea are also working hard to expand their manufacturing power.

By taking a stake in Intel, the U.S. government is making it clear that America does not want to fall behind in this race.

The U.S. government’s decision to buy nearly 10% of Intel is one of the most unusual and important moves in recent years. It shows how far America is willing to go to protect its place in the technology world.

While the deal has supporters and critics, one thing is clear: chips are no longer just a business issue. They are central to America’s economy, security, and future.

This is only the beginning. The world will be watching to see whether Intel can rise again with the government’s backing—and whether other companies might be next in line for similar deals.