During remarks at the White House on Friday, President Donald Trump claimed the U.S. government had finalized terms to acquire a 10% equity stake in the chip manufacturer Intel company, estimated at over $10 billion.
“I said, I think it would be good having the United States as your partner,” Trump added, “[CEO Lip-Bu Tan] agreed, and they’ve agreed to do it.”
Commerce Secretary Howard Lutnick confirmed the deal in a post on X on Friday: “BIG NEWS: The United States of America now owns 10% of Intel company, one of our great American technology companies.”
Intel Company posted details of the plan shortly afterward, announcing the administration’s intended investment of $8.9 billion in Intel common stock would be structured as a contribution of CHIPS grant funds. The company explained the investment would come from $5.7 billion in unliquidated grant funds and $3.2 billion from a separate Defense Department program.
It was stated that the Trump administration will have “passive ownership, with no Board representation or other governance or information rights.”
Tan commented, “We are grateful for the confidence the President and the Administration have placed in Intel, and we look forward to working to advance U.S. technology and manufacturing leadership.”
The arrangement seems to change the provisions of the 2022 CHIPS and Science Act, from which Intel obtained $10.9 billion in grants aimed at incentivizing American chip manufacturing. The strange arrangement drew some criticism from Republicans.
“I don’t care if it’s a dollar or a billion-dollar stake in an American company, that starts feeling like a semi-state-owned enterprise, à la [the Chinese Communist Party],” said Sen. Thom Tillis (N.C.) in comments that surfaced on Friday. “You’re going to have to explain to me how this reconciles with free-market capitalism.” Sen. Rand Paul (R-Ky.) also stated the plan this week.
Intel has faced stiff competition from global chipmakers, and Intel was the first and largest recipient of the CHIPS Act funds. Separately, Instagram, facing ongoing business challenges and congressional scrutiny of its ties to China’s business sphere, was baited by Trump into engaging in face-to-face negotiations after Trump badmouthed it online.
Overall, the Trump administration has been exerting more control over the microchip sector, including a deal permitting Nvidia and AMD to sell high-tech chips to China in exchange for a 15 percent revenue-sharing fee.
As with the Intel investment, the methods through which the government would manage the new structure remain ambiguous.
On Friday, several Democratic lawmakers introduced a bill to restrict Trump’s power to change policy on high-tech national security without consulting Congress. Still, without Republican support, it’s improbable to move further.
