Intel Corp. announced a landmark agreement with the Trump administration that will see the U.S. government take a nearly 10% stake in the chipmaker, deepening Washington’s direct role in domestic semiconductor production and underscoring the industry’s strategic importance.
Under the deal, the government will invest $8.9 billion in Intel’s common stock, purchasing about 433 million new shares at $20.47 each. The investment amounts to a 9.9% ownership position, making the United States one of Intel’s largest shareholders. The funding will come from $5.7 billion in previously awarded but unpaid grants under the CHIPS and Science Act, as well as $3.2 billion tied to the Secure Enclave program, which supports trusted semiconductor production for defense applications. Intel has already received $2.2 billion in CHIPS Act grants, bringing the government’s total backing to $11.1 billion.
The arrangement marks an unusual blending of industrial policy and equity finance, effectively converting federal subsidies into a long-term ownership stake. The government’s role will remain passive, with no board representation or special governance rights. Officials have pledged to vote in alignment with Intel’s board on shareholder matters, with narrow exceptions, and will not take an active role in company decision-making. Washington will also receive a five-year warrant allowing the purchase of an additional 5% of Intel shares at $20 if the company’s control of its foundry business falls below 51%. In return, claw-back and profit-sharing provisions tied to prior CHIPS grants will be eliminated, giving Intel greater capital certainty as it pursues its domestic investment strategy.
Intel Chief Executive Officer Lip-Bu Tan, who took over in March, said the agreement demonstrates the company’s unique position in U.S. technology leadership. “As the only semiconductor company that does leading-edge logic R&D and manufacturing in the U.S., Intel is deeply committed to ensuring the world’s most advanced technologies are American made,” Tan said. Commerce Secretary Howard Lutnick described the deal as both a bet on economic competitiveness and national security, saying the government was “excited to welcome the United States of America as a shareholder, helping to create the most advanced chips in the world.”
The investment comes as Intel undertakes the largest manufacturing expansion in its history in a bid to regain technological leadership from Asian rivals. The company has spent $108 billion on capital projects and $79 billion on research and development over the past five years, much of it directed toward U.S. facilities. It has committed more than $100 billion to domestic expansion, including new fabrication plants in Arizona that are expected to begin high-volume output later this year using the most advanced semiconductor process technology ever deployed on American soil.
The government’s purchase price represents a discount to Intel’s current trading levels, giving taxpayers a potentially lucrative position if the company’s turnaround strategy succeeds. The investment also provides Intel with a substantial infusion of capital to support its manufacturing and technology goals.
The agreement has drawn strong endorsements from major U.S. technology companies that rely on Intel’s products and manufacturing capabilities. Microsoft CEO Satya Nadella said the deal highlights the urgency of strengthening domestic semiconductor supply chains, calling Intel’s commitment “a benefit to the country and broader technology ecosystem for years to come.” Dell Technologies CEO Michael Dell described Intel as the most important company for achieving a resilient U.S. chip industry. HP CEO Enrique Lores said the arrangement would mark “a defining moment for great American companies to lead the world in cutting-edge technologies,” while Amazon Web Services chief Matt Garman said semiconductors remain the bedrock of artificial intelligence and cloud platforms, praising the administration’s support for Intel as critical to national security.
For the U.S., the move reflects a broader shift in policy toward direct participation in critical industries. Semiconductors are viewed as essential to economic competitiveness and military strength, as well as to emerging technologies such as artificial intelligence. The equity investment in Intel could serve as a model for future partnerships between Washington and strategically significant companies.
For Intel, the deal provides financial reinforcement as it executes a turnaround under Tan’s leadership. The company has pledged to revitalize its engineering-first culture and meet its obligations under the Secure Enclave program to deliver trusted, secure semiconductors to the Department of Defense. With Washington now both financier and shareholder, Intel has gained a powerful backer as it pushes forward with its plans to reclaim leadership in chipmaking.
PJT Partners acted as Intel’s exclusive financial adviser on the transaction.
