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The US government has reached a historic agreement to purchase a 10-percent stake in Intel in an unprecedented move to intervene in one of the largest American technology companies. The action follows the pressure mounted by President Donald Trump on Lip-Bu Tan, the Intel CEO, to step down over his connection with Chinese firms, initially being asked to quit. Trump instead declared that the government obtained an equity stake of $10 billion in the ailing chipmaker, which is about the same amount of federal grants that Intel will get under the Chips and Science Act.
Commerce Secretary Howard Lutnick told X that the deal was a fair deal for both Intel and the American people. The president said the result is a victory in which Tan appeared before a White House meeting seeking to retain his position but ended up giving the US $10bn. The investment highlights how Washington is pushing hard to ensure domestic chip manufacturing and cement its control of strategic sectors.
The Intel deal is the most recent of such strange corporate interventions by the Trump administration. The White House already has struck deals with Nvidia and AMD to get a share of chip sales to China, and the Pentagon has invested in rare-earth mining projects. The government also took control of a golden share in Nippon Steel's acquisition of US Steel, which had a right to veto strategic decisions.
Even as Intel is recapitalised by both SoftBank and the federal government, analysts are cautioning that capital injections are only part of the company's problems. In 2024 the company incurred an $18.8 billion loss and remains a distant second to Taiwan Semiconductor Manufacturing Company in terms of advanced chipmaking. To engineer a turnaround, analysts say Intel would have to correct its poor product roadmap and woo new customers to its foundry business.
