White House Confirms Demand for 10% Intel Stake

Recent rumors about the US government’s plan to acquire shares in Intel have finally been confirmed. US Secretary of Commerce Lutnick said on the 19th that Intel must cede equity to the US government in exchange for grants under the CHIPS and Science Act. The White House confirmed the same day that the deal would allow the US government to hold a 10 percent stake in Intel, and the Commerce Department is “finalizing” the details. Western media generally believe that if the deal is reached, the US government will become Intel’s largest shareholder. This case could also serve as a model for other investment projects of the Trump administration, ushering in a new era of US government influence over large companies. However, in the view of some media outlets, including The New York Times, while the Trump administration’s consideration of a major investment in the struggling chip giant is understandable, the move could have significant implications for the tech industry, the AI race and the relationship between the federal government and private companies.

US Stake in Intel in Exchange for Billions in Grants

“If we’re putting money in, we ought to have equity.” On the 19th, during an appearance on CNBC, Lutnick criticized the CHIPS and Science Act signed into law by former President Biden, calling it “essentially giving money to Intel for free.” He emphasized the current administration’s stance: “If we’re going to give you this money, we’re going to have a piece of the action.” He also stated that the U.S. government does not intend to control the company, and any potential arrangement would not grant the government voting or governance rights in Intel.

White House Press Secretary Levitt confirmed the same day that the U.S. Department of Commerce is advancing the deal for the government to acquire a 10% stake, and Secretary Lutnick is finalizing the details. “The President wants to prioritize America’s needs from both a national security and economic perspective.”

Intel did not comment on the plan. However, last week, a company spokesperson stated that they “strongly support President Trump’s efforts to strengthen U.S. leadership in technology and manufacturing.”

On the 18th, Bloomberg cited sources reporting that the federal government is considering converting part or all of the grants Intel was set to receive under the CHIPS and Science Act into equity. The company had originally planned to receive a total of $10.9 billion through such grants, an amount roughly equivalent to what would be needed for a 10% stake.

The BBC described the swap of existing government grants for equity as “highly unusual,” suggesting it could help Intel compete with rivals like NVIDIA, Samsung, and TSMC, particularly in the booming AI chip market. Vincent Fernando, founder of Singapore-based investment advisory firm “01,” noted that given Intel’s critical role in U.S. semiconductor production, government investment in the company is justified. Washington needs to reduce reliance on overseas suppliers for key industries such as chip manufacturing and defense equipment. However, he also cautioned that while the move might provide a boost for Intel, it could “create uncertainty for any company already involved in or considering participating in federal grant programs.”

US Treasury Secretary: “Will not solicit business for Intel”

A day before the White House confirmed it was considering acquiring a stake in Intel, Intel and SoftBank announced that SoftBank would invest $2 billion in the chipmaker. The Wall Street Journal, citing data from S&P Global Market Intelligence, reported that the investment would give the Japanese company about a 2% stake in Intel, making it the sixth-largest shareholder.

However, The New York Times pointed out that funding alone cannot solve Intel’s problems. What the company needs most are customers and innovative new products. In the personal computer chip sector, it lags far behind AMD and Qualcomm; in AI processors, it trails NVIDIA; and its foundry business is nowhere near that of TSMC.

CNBC reported that Intel has struggled to capitalize on the AI boom in advanced semiconductors and has invested heavily in manufacturing expansion without yet securing major customers. Last fall, Intel stated it had secured nearly $8 billion in grants from the CHIPS and Science Act to build new plants in Ohio. But in July, Intel CEO Pat Gelsinger said the company would slow the pace of construction of the new facilities based on market conditions.

“Even if Intel offers better products, will Apple and NVIDIA be forced to choose Intel to stay in the good graces of the U.S. government? To what extent will the U.S. government seek to intervene in industrial policy?” The New York Times asked on the 19th. According to U.S. media reports, including Axios, U.S. Treasury Secretary Janet Yellen, in a CNBC interview on the 19th, was asked whether taking a stake in Intel meant persuading U.S. companies to buy chips from the tech giant. She responded, “The last thing we would do is to take a stake and then try to solicit business for them,” emphasizing that any investment in Intel aims to “help the company stabilize chip production in the U.S.”

“US Government’s Moves in Strategic Sectors Grow Increasingly Assertive”

According to CNBC, Lutnick hinted on the 19th that the Trump administration might seek similar deals with other companies receiving grants under the CHIPS and Science Act. Reuters reported, citing informed sources, that the U.S. Secretary of Commerce is exploring ways to exchange grants for equity in companies such as Micron, TSMC, and Samsung. Taiwan’s United Daily News reported that TSMC declined to comment on “hypothetical issues.”

However, Bloomberg noted that although TSMC and Samsung are expanding their U.S. operations with support from the CHIPS and Science Act, ensuring that U.S. companies like Intel produce cutting-edge chips domestically has been a shared priority for both the Trump and Biden administrations. Earlier this year, the Trump team held preliminary discussions with TSMC about the possibility of the Taiwanese company operating Intel’s factories, but TSMC has since withdrawn from the arrangement. U.S. government officials have also internally proposed seeking potential investment from the UAE in Intel.

“U.S. government moves in strategic sectors grow increasingly assertive,” Bloomberg stated. The Trump administration has reached agreements with NVIDIA and AMD, allowing them to export AI chips to China on the condition that the government takes a 15% cut from their sales to the country. In July, the U.S. Department of Defense announced a $400 million investment to acquire a stake in U.S. rare earth producer MP Materials, making it the company’s largest shareholder. In June, as part of approving the sale of U.S. Steel to Japan’s Nippon Steel, the U.S. government secured a so-called “golden share.” Reuters reported that this measure is intended to prevent the companies from reducing or delaying committed investments, moving production or jobs outside the U.S., or closing or idling plants before a specified time without presidential approval.

CNN reported that Trump is committed to revitalizing U.S. manufacturing and consolidating American leadership in technology, two key pillars of his policy agenda during his second term. However, The Wall Street Journal argued that the U.S. government’s intervention in the chip industry has crossed a line. It must exercise caution to avoid undermining the market dynamics of the U.S. tech sector.