CHENNAI: The US government has acquired a 10 percent stake in chip maker Intel as part of President Donald Trump’s new approach to the nation’s chip strategy. The deal, valued at around 11 billion dollars, converts earlier CHIPS Act grants and Secure Enclave program funds into equity, giving Washington about 433 million Intel shares at a price of roughly 20.5 dollars each. This is below Intel’s recent market price, making the purchase financially favorable to the government.
The stake is structured as non-voting common stock, meaning the government will not have direct control over Intel’s decisions or board representation. However, it will align its shareholder votes with the company’s board except in limited circumstances, and a five-year warrant allows the government to increase its holding by another five percent if certain conditions are triggered.
This marks a significant shift in US industrial policy. Unlike past support through subsidies and tax breaks, Washington is now directly taking ownership in a major technology company. The move follows concerns about America’s dependence on foreign chipmakers and growing competition with China in advanced semiconductors. By stepping in as a partial owner, the Trump administration aims to secure Intel’s role in rebuilding domestic chip production.
Intel, once the undisputed leader in semiconductors, has been under heavy strain. It has posted over 20 billion dollars in cumulative losses since 2023, faces layoffs, and has fallen behind rivals like Nvidia and AMD in cutting-edge chip design. The cash infusion gives the company breathing space to stabilise its foundry operations and push ahead with advanced manufacturing, though questions remain about its ability to mount a full comeback.
Financial markets welcomed the announcement. Intel’s shares rose between five and seven percent immediately after the deal was revealed, as investors saw the government’s involvement as a sign of long-term backing. Still, critics argue that direct government ownership could politicize corporate decision-making, distort competition, and blur the line between public policy and private enterprise.
The deal is also being viewed as a test case. If successful, it could set a precedent for similar arrangements with other strategic technology and manufacturing companies. Already, the Trump administration has signaled a more interventionist stance by linking public funding to equity stakes and exerting influence over critical supply chains.
For Intel, the partnership offers crucial support at a difficult moment. For Washington, it represents a bold experiment in using ownership, not just subsidies, to shape the future of America’s semiconductor industry.