The Trump administration announced Friday that it has taken a 10% stake in Intel, paid for through $5.7B in grants previously awarded to Intel under the 2022 U.S. CHIPS and Science Act, plus $3.2B awarded to the company as part of a program called Secure Enclave, a formerly classified initiative funded by Congress in 2024 that’s designed to support the trusted manufacturing of advanced microelectronics for U.S. government and defense use.
President Trump praised the company’s CEO Lip-Bu Tan on Truth Social, just two weeks after he called on Tan to resign over alleged China ties:
“It is my Great Honor to report that the United States of America now fully owns and controls 10% of INTEL, a Great American Company that has an even more incredible future. I negotiated this Deal with Lip-Bu Tan, the Highly Respected Chief Executive Officer of the Company. The United States paid nothing for these Shares, and the Shares are now valued at approximately $11 Billion Dollars. This is a great Deal for America and, also, a great Deal for INTEL. Building leading edge Semiconductors and Chips, which is what INTEL does, is fundamental to the future of our Nation.”
I was hesitant to cover this story in too much depth, given how this is an e-commerce focused publication and chip manufacturing is only adjacent to the primary topics I typically cover (chips –> AI –> e-commerce). However I had questions that I figured you might have too, so let’s try and answer some of them.
Is this legal?
Yes. The U.S. government can legally own stock in private companies through appropriated programs or emergency measures, though it’s uncommon. The government took similar moves with banks and automakers during the 2008 financial crisis. (Does that mean we’re in a crisis?)
Do other democracies do this?
Yes. Many democracies, including France, Germany, and Japan, hold partial stakes in private corporations, often in strategic industries like energy, transportation, or technology, to protect national interests or support economic stability. For example, France owns about 15% of Renault to maintain influence over its automotive industry and Germany owns about 15% of Deutsche Telekom, the country’s largest telecom provider.
Additionally, many governments run sovereign wealth or public investment funds, like Norway’s Government Pension Fund Global, Singapore’s Temasek Holdings, or Abu Dhabi’s Mubadala, which actively invest in private and public companies worldwide. The difference being that the direct investment in one company, Intel, is aimed at securing national security and domestic chip manufacturing rather than broad financial gain.
Does the U.S. government own stake in any other private companies?
Prior to this deal with Intel, no, the U.S. government did not hold equity stakes in other major private companies. Past stakes (like GM and AIG in 2008) were temporary and later sold off.
How does this fare for Nvidia and other chipmakers in terms of a competitive edge?
It could tilt the playing field. U.S. backing gives Intel financial stability and guaranteed government contracts, while rivals like Nvidia, AMD, and TSMC may see it as unfair support that distorts competition.
On the opposite side of the coin, Intel said that the U.S. government’s stake in the company could actually pose some risks to its business, potentially harming international sales and limiting its ability to secure future government grants. Sales outside the U.S. accounted for 76% of Intel’s revenue last year, with 29% of total revenue coming from China.
Trump may have taken 10% of Intel, but competitors aren’t immune to the Trump Tax completely. Earlier this month, Trump persuaded Nvidia and AMD to pay the U.S. government 15% of their revenues from some sales to China in return for securing export licenses there.
Did Intel want this or were they strongarmed by Trump?
Tan said, “I don’t need the grant, but I really look forward to having the U.S. government be my shareholder.” Then again, what else is the CEO supposed to say?
Does the government control Intel now?
No. This investment is structured as passive ownership, meaning the government holds non‑voting shares and agrees to vote with Intel’s board on shareholder matters.
What do Democrats think of the move?
Senator Bernie Sanders expressed support, stating that if chipmakers profit from generous federal grants, “taxpayers of America have a right to a reasonable return on that investment”.
Senator Mark Warner said, “U.S. leadership is critical for both our economy and national security. Taking an equity stake in Intel may or may not be the right approach, but one thing is clear: allowing cutting-edge chips to flow to China without restraint will erode the value of any investment we make her at home.”
Other democrats aren’t aren’t as pleased with the move, calling it “socialism” or “Marxism.” For example, former Obama undersecretary of state Rick Stengel said, “Trump’s strong-arming Intel for gov’t equity is something Mao and Stalin would be proud of.”
What’s next? Could this set a precedent?
Potentially, yes. The Intel stake could set a precedent for the U.S. to take ownership positions in other strategic tech or defense companies. President Trump actually said today that he’s determined to do similar deals “all day long” with other companies.
What are your thoughts? Join the conversation on LinkedIn.
