U.S. Takes 10% Stake in Intel Amid AI and National Security Push
Big news has just come out: the U.S. government has officially taken a 10% stake in Intel, the iconic American chipmaker. This unprecedented move was announced by former President Donald Trump, marking one of the most extraordinary interventions in corporate America in recent history. What makes this deal stand out is that the government will not be seeking direct representation on Intel's board. Instead, it has pledged to generally align with the company’s existing board of directors on shareholder votes, with only limited exceptions.
The timing of this stake is particularly striking. Intel, once a dominant force in semiconductors, has struggled to keep up with competitors like Nvidia and AMD, especially in the booming artificial intelligence sector. Over the past few years, the company’s stock has fallen roughly 60% from its pandemic highs, and it reported a staggering $18.8 billion loss in 2024—its first since 1986. Yet, amid the global AI arms race, the U.S. has decided that securing a stronger domestic semiconductor base is a national priority, and Intel was selected as a key player in that strategy.
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Trump himself framed the deal as a major victory, praising Intel CEO Lip-Bu Tan on social media shortly after previously calling for his resignation over alleged ties to China. The government’s 10% stake is effectively valued at around $11 billion, financed by previously awarded grants under the 2022 U.S. CHIPS and Science Act and a program called Secure Enclave. Notably, the shares were obtained at no additional cost to taxpayers, a point emphasized by the administration.
Analysts note that while federal backing could give Intel some breathing room to revive its struggling foundry business, serious challenges remain. Intel’s technological gap with rivals like TSMC is significant, and attracting customers to its new factories may not be straightforward. Even with this investment and recent capital injections—like the $2 billion from Japan’s SoftBank—Intel faces a long road to regain its former dominance.
Politically, the move reflects a broader strategy of increased government involvement in strategic industries. Similar deals have been struck with other tech giants, including export revenue agreements with Nvidia and AMD, and Pentagon-backed initiatives in mining and steel. Critics warn that using taxpayer money to prop up a struggling company is risky, and government intervention in business has historically been a gamble at best.
Still, supporters argue that ensuring U.S. leadership in semiconductor production is essential for national security and economic competitiveness, especially given the country’s reliance on Taiwan for critical chip supply. For now, Intel is positioned at the center of a high-stakes game, with Washington betting that this once-dominant tech giant can be revitalized to meet the demands of the AI era and secure America’s technological future.
The big question remains: can Intel rise again, or is this government-backed gamble destined to become another cautionary tale in the intersection of politics and business? Either way, the U.S. has signaled that it’s willing to play an unprecedented role in shaping the future of its own tech industry.
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