U.S. to take nearly 10% stake in Intel under Trump deal

August 25, 2025 (MLN): President Donald Trump declared that the U.S. government will acquire nearly 10% of Intel (INTC.O) as part of a deal designed to convert government grants into equity, marking the latest intervention by the White House in corporate America.

The agreement secures about $10 billion in funding for Intel to build or expand manufacturing facilities in the United States.

Under the terms, Washington will purchase 433.3 million shares representing a 9.9% stake for $8.9bn at $20.47 per share, as Bloomberg reported.

That price reflects a discount of roughly $4 from Intel’s Friday closing value of $24.80.

The investment will draw on $5.7bn in unpaid CHIPS Act grants awarded under the Biden administration, along with $3.2bn provided through the Secure Enclave program, also introduced during President Joe Biden’s term.

Intel stock climbed 5.5% during regular trading and added about 1% after hours following the news.

Trump, who had previously called for Intel CEO Lip-Bu Tan’s resignation over ties to Chinese firms, met with him on Friday for a second time this month.

“He walked in wanting to keep his job and he ended up giving us $10bn for the United States. So we picked up $10bn,” Trump said after the meeting. Commerce Secretary Howard Lutnick described the deal on X as “fair to Intel and fair to the American People.”

The agreement grants the U.S. passive ownership without a board seat. Intel confirmed that the government will be required to vote alongside the company’s board on shareholder matters, with “limited exceptions.”

Additionally, the stake includes a five-year warrant at $20 a share for another 5% ownership, exercisable if Intel loses control of its foundry operations.

This deal follows a series of unconventional government arrangements with U.S. companies.

Recent examples include a pact allowing Nvidia (NVDA.O) to sell H20 chips to China in exchange for Washington receiving 15% of those sales, and the Pentagon becoming the largest shareholder in MP Materials (MP.N) to secure rare earth magnet supplies.

The government also won a “golden share” with veto rights in the planned takeover of U.S. Steel by Japan’s Nippon Steel (5401.T).

Ahead of Washington’s move, Japan’s SoftBank (9984.T) disclosed a $2 billion investment in Intel earlier this week.

Still, concerns remain about Intel’s long-term outlook.

Daniel Morgan, senior portfolio manager at Synovus Trust, argued that “without government support or another financially stronger partner, it will be difficult for the Intel foundry unit to raise enough capital to continue to build out more Fabs at a reasonable rate.”

He added that Intel “needs to catch up with TSMC from a technological perspective to attract business.”

The federal backing may offer Intel breathing space as it seeks to revive its struggling foundry business, but the company continues to trail Nvidia in the AI market and has ceded CPU share to Advanced Micro Devices (AMD.O).

The company also faces hurdles in winning customers for its new fabrication plants.

Intel has been under pressure after recording an $18.8 billion annual loss in 2024 its first since 1986.

The last year of positive adjusted free cash flow was 2021.

CEO Tan, who took the helm in March, is tasked with turning around the company and restoring its position as a U.S. chipmaking leader.

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