US takes 10% stake in Intel, Trump and Lutnick announce after share price surges 5.5%
The Trump administration announced Friday that it had taken a 10% stake in Intel, in one of the biggest government interventions in private enterprise since the Great Recession
Shares of the embattled chip maker surged 5.5% on the NASDAQ after Trump teased the purchase in the Oval Office. The official announcement was made by Intel and Commerce Secretary Howard Lutnick after the market closed.
The agreement was reached after Trump met with new Intel CEO Lip-Bu Tan earlier this month, then reversed his Aug.7 call for Tan to “resign immediately” over his alleged investments in businesses with ties to the Chinese military.
“He came in. He saw me. We talked for a while. I liked him a lot. I thought he was very good. I thought he was somewhat a victim,” Trump told reporters in the Oval Office. “And, I said, ‘You know what? I think the United States should be given 10% of Intel.’”
“And I said, ‘I think it would be good having the United States as your partner.’ He agreed, and they’ve agreed to do it. And I think it’s a great deal for them,” the president continued.
Trump boasted that Tan “walked in wanting to keep his job, and he ended up giving us $10 billion.”
The deal calls for the US to receive 433.3 million shares of non-voting stock priced at $20.47 apiece — a discount from Friday’s closing price of $24.80. That spread means the feds already have a gain of $1.9 billion, on paper.
The $8.9 billion investment will be paid for by $5.7 billion in funding from the CHIPS and Science Act of 2022 that was approved by the Biden administration but has yet to be paid out, and $3.2 billion awarded to the company last year as part of the Secure Enclave program.
Intel has already received $2.2 bilion in grants from the CHIPS and Science Act, for a total investment of $11.1 billion.
Commerce Secretary Howard Lutnick described the deal as “fair to Intel and fair to the American People,” in a post on X.
“This historic agreement strengthens US leadership in semiconductors, which will both grow our economy and help secure America’s technological edge,” Lutnick wrote.
Tan, hired by Intel in March, has been tasked with turning around the troubled chipmaker, which reported an annual loss of $18.8 billion last year — its first since 1986.
In a statement, Tan applauded Trump for “driving historic investments in a vital industry” and resolved to reward his faith in Intel. “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,” Tan said.
The company received a $2 billion lifeline from Japan-based SoftBank Group earlier this week, in a capital injection viewed as a vote of confidence in Tan and the chipmaker’s attempt to navigate financial headwinds.
“Intel has been left behind,” Trump argued at the White House.
“Intel was the biggest, most powerful chip company in the world – and then, they started leaving and they started going to foreign countries, in particular Taiwan,” he added. Trump has previously pushed for multibillion-dollar government deals with private industry to secure US access to semiconductors and rare earth minerals, including with Nvidia and rare-earth producer MP Materials.
