On August 22, 2025, President Donald Trump announced an agreement with Intel Corporation that will give the U.S. government a nearly 10% equity stake in the chipmaker. The deal marked a dramatic departure from the traditional hands-off approach to private enterprise.
Under the agreement, Intel issued 433.3 million shares for $20.47 each. The company noted at the time that the price was a slight discount from the market. Of the total $8.9 billion investment, $5.7 billion came from grants under the CHIPS Act, and $3.2 billion came from separate government awards. Trump praised Intel CEO Lip-Bu Tan, highlighting their partnership as a cornerstone for revitalizing U.S. chipmaking capacity.
The Intel stake is among the most significant U.S. government investments in a private company since the 2008 bailout of General Motors, when the government invested nearly $50 billion for a 60% stake in the automaker. Furthermore, the deal underscores Trump’s willingness to use equity leverage as a policy tool to reprogram the operations of major computer chip corporations. Earlier this month, Nvidia and Advanced Micro Devices, two companies at the epicenter of the artificial intelligence boom, agreed to pay a 15% commission on their sales in China in exchange for export licenses.
Supporters argue the deal strengthens the domestic semiconductor industry, which is vital for technological advancement and insulating the U.S. from geopolitical risks. Trump also found an unusual ally in Democratic Senator Bernie Sanders, who offered cautious praise of the decision.
Unfortunately, the deal may have no long-term benefit for Intel.
Principally, critics view the agreement as government overreach. Free-market Republicans and policy analysts warn that direct ownership in private industry risks setting a precedent for further intervention. Republican Senator Rand Paul wrote on X: “If socialism is [the] government owning the means of production, wouldn’t the government owning part of Intel be a step toward socialism?” He added that the investment was a “terrible idea.” On the other side of the political aisle, Senator Ron Wyden, a Democrat, said in a scathing statement that the deal “is nothing more than corporate extortion from Donald Trump and his cabinet of bobbleheads acting more like a mob family squeezing out protection money than an administration working in our economy’s best interests.”
Although Intel stock rose sharply in value at first, it has since stagnated. As of mid-September, the price of a single share remained around twenty-five dollars, less than half its value five years ago amidst the COVID-19 Pandemic. It goes without saying that Intel, although still possessing substantial influence, has begun to lose its footing over the last decade.
The fundamental problem of Intel remains its lagging advancements in technology. In the past, Intel focused too much on maintaining its x86 monopoly, leading to a lack of care in new technologies. This move, evidently, has come back to ravage them. Rivals like Taiwan Semiconductor Manufacturing Company (TSMC), Nvidia, and Advanced Micro Devices (AMD) are matching or even surpassing the current capacity of Intel.
Furthermore, Intel’s attempts to become a foundry have been unsuccessful, consuming significant resources without yielding tangible benefit. Intel reported a financial loss of $3.2 billion on $4.4 billion in revenue in the most recent quarter and an external revenue of a measly $53 million in the first half of 2025. The situation worsened to the point that Intel had considered abandoning its 14A chip manufacturing technology altogether before the recent deal was struck.
The $8.9 billion in funding has the potential to spark innovation and revivify the floundering foundry field. Still, there’s a downside even in this benefit. A key clause in the agreement asserts that the federal government has the ability to acquire an additional 5 percent of Intel stock if the company reduces its foundry ownership below 51%. This once more brings the problem of the government wielding too much power, as the current administration will thus hold a large degree of control in the manufacturing process, and, to a lesser degree, the entirety of Intel.
One thing is clear: the Trump-Intel deal has redefined the relationship between Washington and Silicon Valley in ways that will have a lasting impact for years to come.
(This story also appeared in The Red Folder.)
