In a significant move that underscores the U.S. government’s deeper involvement in the private sector, the Trump administration has acquired a 10% stake in Intel Corporation, the only American company currently capable of manufacturing advanced chips on U.S. soil.
$8.9 Billion Investment in Intel
According to a press release from Intel, the U.S. government invested $8.9 billion in common stock, purchasing 433.3 million shares at $20.47 each, representing a 10% ownership stake.
- The purchase price reflects a discount to Intel’s current market value.
- At present, the government’s stake is valued at approximately $11 billion.
Funding Structure: CHIPS Act and Secure Chip Programs
Of the total investment:
- $5.7 billion comes from grants under the CHIPS Act, which had been previously awarded but not disbursed.
- $3.2 billion comes from separate government funds allocated to secure chip development.
Additionally, the U.S. government received a warrant to acquire another 5% stake in Intel if the company is no longer the majority owner of its foundry business.
No Governance Rights for the Government
Despite the investment, Intel clarified that the U.S. government will not hold a board seat or exercise governance rights.
Intel CEO Lip-Bu Tan emphasized:
“As the only semiconductor company conducting leading-edge R&D and manufacturing in the U.S., Intel is committed to ensuring the world’s most advanced technologies remain American made.”
Shift in U.S. Industrial Policy
The move reflects a strategic shift in U.S. industrial policy, where the federal government is directly taking equity stakes in critical industries.
SoftBank Joins as Investor
Intel also secured support from the private sector this week, with SoftBank announcing a $2 billion investment, giving it a 2% stake in the chipmaker.
Key Takeaways
- U.S. government acquires 10% of Intel with an $8.9B investment.
- Funds drawn from the CHIPS Act ($5.7B) and secure chip programs ($3.2B).
- Stake valued at $11B today, with a 5% warrant option for future purchase.
- Marks a new phase of U.S. industrial policy under Trump.
- SoftBank invests $2B, gaining a 2% stake in Intel.
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