U.S. Government Acquires 10% Stake in Intel for $8.9 Billion

Intel's stock rose by up to 10% following a $2 billion investment from SoftBank. The Trump administration initially considered taking a stake in Intel but later dismissed the idea. Intel CEO Lip-Bu Tan met with President Trump at the White House on August 11 to discuss a deal aimed at boosting domestic semiconductor fabrication. Intel is also considering giving the government equity in exchange for CHIPS Act funding, with discussions including a potential 10% stake for the Trump Administration. Additionally, Intel completed the sale of a 51% stake in its Altera division to Silver Lake for approximately $3.3 billion, leading to an updated financial outlook and a reduction in full-year expenses. Intel has revised its 2025 adjusted operating expense target to $16.8 billion from $17 billion, reflecting the deconsolidation of Altera, while maintaining its 2026 target at $16 billion. Intel's shares have risen over 20% year-to-date, outperforming the Nasdaq Composite Index's 15% return, partly due to the U.S. government taking a significant equity position in Intel, converting CHIPS Act grants into a $5.7 billion stake, which gives the government 10% ownership and more influence over the company's strategy.

SoftBank has invested $2 billion in Intel, taking a stake in the struggling chipmaking company. Following the announcement, Intel stock prices jumped, with reported increases of 5% and 7%. In contrast, SoftBank shares fell by over 5% after the investment was announced. There are also reports that the Trump Administration is considering taking a 10% stake in Intel.

The U.S. government has taken a 10% stake in Intel, as announced by Commerce Secretary Howard Lutnick and confirmed by a press release from Intel. The government invested $8.9 billion in Intel common stock, purchasing 433.3 million shares at a price of $20.47 per share, representing a discount to the current market price. Of this investment, $5.7 billion comes from grants under the CHIPS Act that had been awarded but not yet paid, and $3.2 billion comes from separate government awards for secure chip manufacturing. President Trump wrote on Truth Social that the U.S. paid nothing for the shares, now valued at approximately $11 billion, calling it a great deal for America and Intel.

The government also receives a warrant to buy an additional 5% of Intel shares if the company is no longer the majority owner of its foundry business. Intel stated that the U.S. government will not have a board seat or other governance rights as part of the agreement. Intel CEO Lip-Bu Tan said in the press release that Intel is committed to ensuring the world’s most advanced technologies are American-made. White House officials stated that President Trump and CEO Tan were scheduled to meet on Friday afternoon. The deal marks a shift in U.S. industrial policy, with the government seeking equity in exchange for CHIPS Act funds. Earlier in the week, SoftBank announced a $2 billion investment in Intel, equating to about 2% of the company.