US acquires 10% stake in Intel for $8.9b

• Trump is linking national security interests with aggressive industrial policy: giant government investments in semiconductors, rare earths—and even creative “pay-for-play” deals with AI titans like Nvidia.

US President Donald Trump announced that the United States would take a 10 per cent stake in struggling chip giant Intel. The surprise move is turning heads—not just for its size ($8.9 billion), but for how boldly the White House is inserting itself into America’s corporate engine room.

The US government has agreed to purchase 9.9 per cent of Intel, making them a real heavyweight in the legacy chipmaker’s future. The purchase price? $20.47 per share, which is a relatively sweet deal, considering Intel closed Friday at $24.80. That’s about $4 below the market—nothing to sneeze at for taxpayers footing the bill.

To pay for the shares, the White House is tapping two big sources: $5.7 billion in still-unspent Chips Act grants and $3.2 billion slated for a project called Secure Enclave. Together, those funds make the acquisition possible without needing a new Congressional fight over spending.

High-stakes negotiations

Intel’s CEO, Lip-Bu Tan, has had a whirlwind month. He was called to a tense sit-down with President Trump earlier in August—a meeting originally triggered by Trump’s fiery call for Tan to quit over his history with Chinese firms.

Instead of walking out with a pink slip, Tan seems to have walked away with $10 billion for Intel and a deal that’s got tongues wagging across the financial sector.

After the accord, Commerce Secretary Howard Lutnick didn’t waste a minute declaring: “The United States of America now owns 10 per cent of Intel.” He emphasised that the transaction was “fair to Intel and fair to the American People,” positioning it as a win-win—though critics may see it differently.

A pattern of unusual moves

Friday’s Intel investment is only the latest in a string of extraordinary government interventions:

• The US clinched a deal with Nvidia: it must let Washington receive a 15 per cent cut of H20 AI chip sales to China.
• The Pentagon is about to become the biggest shareholder in a lesser-known rare earth magnet maker.
• The government snatched up a “golden share” with powerful veto rights as Nippon Steel seeks to acquire US Steel.

These policy pivots are stirring discomfort among critics who worry that ever-deeper government entanglement could reshape how risks are calculated in corporate America.

Why Intel? Why now?

Intel has suffered a bruising two years, posting an eye-popping $18.8 billion loss in 2024—the first red ink the company’s seen since the 1980s. Their once-mighty foundry business is coughing and wheezing, falling far behind Taiwan’s TSMC in technology and market share.

The White House also insists it’s not seeking similar deals with other chipmakers, like TSMC or Micron, for now.

But overall, Trump’s break-the-mold approach is clear. He’s linking national security interests with aggressive industrial policy: giant government investments in semiconductors, rare earths—and even creative “pay-for-play” deals with AI titans like Nvidia.

It’s a bold and risky path, and the results are bound to ripple through both the economy and policy debates for years to come.