In a move that’s turning heads across both Wall Street and Washington, President Donald Trump announced on Friday, August 22, 2025, that the United States government will acquire a significant 9.9% stake in Intel, the storied American chipmaker. The deal, valued at $8.9 billion, marks a striking intervention by the White House into the affairs of one of the country’s most important technology giants. The agreement, which converts federal grants into equity, represents a new chapter in the government’s push to secure domestic chip supply and revive an industry pillar that’s been struggling to regain its former glory.
According to StratNews Global and The Globe and Mail, this arrangement will see the government buy 433.3 million Intel shares at $20.47 each—a roughly $4 discount from Intel’s closing share price of $24.80 on the day of the announcement. The purchase is funded by $5.7 billion in unpaid grants from the Biden-era CHIPS Act and $3.2 billion awarded to Intel for its Secure Enclave program, both critical initiatives aimed at strengthening America’s semiconductor capabilities.
For Intel, the infusion of capital couldn’t come at a more pivotal time. The company recently posted an annual loss of $18.8 billion for 2024—its first such loss since 1986. Its last year of positive adjusted free cash flow was back in 2021, a stark indicator of the challenges facing the Silicon Valley behemoth. Lip-Bu Tan, who took the reins as CEO in March 2025, now finds himself at the center of a high-stakes turnaround effort. The company’s foundry business, which manufactures chips for other firms, has been bleeding cash, and Intel’s once-dominant position in central processors has been chipped away by rivals like Advanced Micro Devices and Taiwan’s TSMC.
President Trump’s announcement follows a tense meeting with Tan earlier this month, on August 11, when the president demanded the CEO’s resignation over alleged conflicts of interest stemming from Tan’s ties to Chinese firms. But on Friday, after another meeting at the White House, Trump struck a more conciliatory tone. As reported by StratNews Global, Trump told reporters, “He walked in wanting to keep his job and he ended up giving us $10 billion for the United States. So, we picked up $10 billion.” Commerce Secretary Howard Lutnick echoed the sentiment, posting on X that Tan had struck a deal “that’s fair to Intel and fair to the American People.”
Intel, for its part, has described the government’s stake as passive. The government will not receive a board seat and will be required to vote with Intel’s board on shareholder matters, except in limited, unspecified circumstances. The deal also includes a five-year warrant at $20 a share for an additional 5% stake in Intel, which the government can exercise if Intel loses control of its foundry business—a clause that adds a layer of complexity and potential future leverage.
The market responded swiftly to the news. Intel’s stock surged more than 6% on Friday, closing up 5.5% during regular trading and rising another 1% in after-hours trading. The optimism, however, is tempered by skepticism from industry analysts. Daniel Morgan, senior portfolio manager at Synovus Trust, questioned whether the capital infusion would be enough to address Intel’s deeper issues. “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 told StratNews Global. Morgan added that Intel “needs to catch up with TSMC from a technological perspective to attract business.”
The government’s move is part of a broader pattern of direct intervention in corporate America, especially in strategic sectors like semiconductors and rare earths. President Trump has not shied away from such measures. Earlier this year, the administration struck a deal allowing Nvidia to sell its H20 artificial intelligence chips to China in exchange for the government receiving 15% of those sales. The Pentagon also became the largest shareholder in MP Materials, a rare earth mining company, to secure critical mineral supplies. And in another unusual arrangement, the government won a “golden share” with veto rights as part of the approval for Japan’s Nippon Steel to acquire US Steel.
Before the US government stepped in, Japan’s SoftBank Group made its own show of confidence, agreeing on Monday, August 18, to take a $2 billion stake in Intel. This move was widely seen as a critical lifeline for the company, which has struggled to attract big customers to its new factories and suffered from a weak product roadmap, according to The Globe and Mail. Still, some analysts remain unconvinced that either the SoftBank or government investments will be enough to restore Intel to its former dominance.
The federal backing is expected to give Intel much-needed breathing room to revive its loss-making foundry business, a sentiment echoed by several industry observers. But the company’s challenges go beyond capital. Intel has ceded the artificial intelligence chip market to Nvidia and lost significant ground in its core processor business. Attracting new customers to its factories remains an uphill battle, and the company’s technological lag behind TSMC is a persistent concern for investors and policymakers alike.
President Trump’s approach to national security and industrial policy has been anything but conventional. His administration’s willingness to take equity stakes in major corporations, tie government grants to ownership, and negotiate direct deals with foreign and domestic firms represents a significant departure from previous norms. While supporters argue these moves are necessary to secure America’s technological future and reduce dependence on foreign supply chains, critics warn that such interventions create new categories of corporate risk and could have unintended consequences for the broader economy.
For Lip-Bu Tan, the stakes couldn’t be higher. Tasked with turning around an American icon, he must now navigate not just the cutthroat world of global chip manufacturing but also the unpredictable currents of Washington politics. The deal with the US government may buy Intel time, but the company’s long-term success will depend on its ability to innovate, execute, and win back the trust of customers and investors alike.
As the dust settles on this historic deal, one thing is clear: the intersection of government policy and corporate strategy in America’s tech sector is entering uncharted territory. Whether this bold experiment pays off for Intel, the White House, or the American people remains to be seen. But for now, all eyes are on Silicon Valley—and the next move in a high-stakes game that could shape the future of global technology.
