In a move that has sent ripples through both Wall Street and Silicon Valley, the Trump administration is advancing a plan for the U.S. government to take a 10% equity stake in semiconductor giant Intel, marking a dramatic shift in how federal support for key industries may be structured in the future. The proposal, first confirmed by the White House on Tuesday, comes as part of a broader effort to bolster American manufacturing, particularly in the highly competitive and strategically vital chip sector.
White House Press Secretary Karoline Leavitt, addressing reporters in the Brady Briefing Room, emphasized the significance of the move. “The president wants to put America’s needs first, both from a national security and economic perspective, and it’s a creative idea that has never been done before,” Leavitt stated, according to BBC. She underscored that the administration views the deal as crucial for both safeguarding the nation’s technological edge and ensuring economic resilience.
At the heart of the proposal is a swap: existing government grants, allocated under the Biden-era CHIPS Act, would be converted into an equity position in Intel. U.S. Commerce Secretary Howard Lutnick, who is spearheading the effort, explained the rationale on CNBC: “We should get an equity stake for our money. We’ll get equity in return for that… instead of just giving grants away.” Lutnick’s remarks highlight a philosophical shift from previous administrations, which typically offered grants to spur domestic manufacturing without seeking a direct financial return.
The CHIPS Act, with its $52.7 billion war chest, was originally designed to kickstart semiconductor factory-building across the country. But under the new plan, the government isn’t just writing checks—it’s becoming an investor. Lutnick, according to Reuters, wants to extend this equity-for-grants model beyond Intel to other major chipmakers, including Micron, Samsung, and Taiwan Semiconductor Manufacturing Co. (TSMC). While TSMC and Intel declined to comment, the possibility of government stakes in such companies is already drawing global attention.
For Intel, the deal could be a lifeline. Once the undisputed leader in chipmaking, Intel has struggled in recent years to keep pace with rivals like Nvidia, Samsung, and TSMC—especially in the booming artificial intelligence (AI) chip market. The proposed agreement would help finance Intel’s ambitious plan to build a flagship manufacturing hub in Ohio, a project seen as vital for restoring American leadership in advanced semiconductors.
The timing of the announcement is notable. Just a day before the White House confirmed its intentions, Japanese investment giant SoftBank revealed it would buy a $2 billion stake in Intel. The news sent Intel’s shares soaring nearly 7% in New York trading, a surge that analysts attributed to renewed confidence in the company’s turnaround prospects. As Vincent Fernando of investment consultancy Zero One told the BBC, “The government taking a stake in Intel makes sense, given the company’s key role in producing semiconductors in the U.S.”
Yet the government’s intervention in corporate America is not without controversy. Critics warn that such moves create new categories of risk for both companies and taxpayers. “While the U.S. government took stakes in companies during the global financial crisis, this move is extremely unusual,” said Kevin J Fox from the University of New South Wales Sydney, in comments to BBC. He cautioned that Intel is not at risk of imminent collapse, and partial state ownership could complicate business operations or deter other firms from accepting government grants in the future.
The debate extends beyond U.S. borders. In Taipei, Taiwan’s Economy Minister Kuo Jyh-huei told lawmakers that his ministry would consult with TSMC and the National Development Council regarding the possibility of a U.S. government stake in the world’s leading chipmaker. “We will thoroughly understand the underlying meaning of the U.S. Commerce Secretary’s remarks, but this will require some time for discussion and assessment,” Kuo said, as reported by Reuters. The implication is clear: America’s new approach could have far-reaching consequences for global supply chains and international relations.
President Donald Trump’s fingerprints are all over the plan. According to Reuters, Trump has previously criticized the CHIPS Act for handing out “free money” to corporations. Lutnick echoed this sentiment, saying, “The Biden administration literally was giving Intel money for free and giving TSMC money for free, and all these companies just giving the money for free, and Donald Trump turned it into saying, ‘Hey, we want equity for the money. If we’re going to give you the money, we want a piece of the action for the American taxpayer.’”
Notably, the proposed government stake in Intel would be nonvoting, meaning Washington would not have direct control over corporate decisions. This structure is designed to avoid the perception of heavy-handed government interference, even as it seeks to ensure a financial return on public investment. Treasury Secretary Scott Bessent is also involved in the discussions, but insiders say Lutnick is driving the process, with strong backing from the president.
The current flurry of activity comes against a backdrop of unprecedented deals in the tech sector. Just last week, Nvidia and AMD agreed to pay the U.S. government 15% of their Chinese revenues as part of a groundbreaking arrangement to secure export licenses to China. At the same time, the Pentagon is poised to become the largest shareholder in a small mining company to boost domestic output of rare earth magnets—another critical component in high-tech manufacturing.
Supporters of the new strategy argue that it’s a necessary response to intensifying global competition and mounting concerns over supply chain security. The COVID-19 pandemic and ongoing geopolitical tensions have exposed the risks of relying on foreign suppliers for essential technologies. “Washington needs critical industries like chip manufacturing and defense to not have to rely on foreign suppliers,” Fernando told the BBC, pointing to the strategic importance of keeping production on American soil.
Still, the government’s more assertive posture is raising eyebrows in boardrooms and on Capitol Hill alike. Some lawmakers and industry leaders worry that the precedent of equity-based grants could chill private investment or entangle companies in political battles. Others see it as a bold experiment—one that could redefine the relationship between the federal government and the private sector for years to come.
As the details of the Intel deal and potential expansions to other companies are hammered out, all eyes will be on how this unorthodox approach plays out. Will it reinvigorate American manufacturing and secure the nation’s technological future, or will it introduce new risks and uncertainties into an already volatile industry? For now, the only certainty is that the rules of the game are changing—and fast.
With the CHIPS Act’s billions still largely untapped and the world watching, the administration’s gamble on equity stakes could mark a turning point in industrial policy. Whether it pays off for taxpayers, companies, and the country as a whole remains to be seen, but one thing is clear: America’s approach to tech investment will never be quite the same.
