The Trump administration has bought a 10% stake in leading chipmaker Intel on Friday, just days after SoftBank purchased a 2% share.
The US government has announced the purchase of a 10% Intel stake at a value of $8.9 billion. News of the deal emerged on Friday after Donald Trump confirmed the investment in a post on his Truth Social platform.
Following the news, Intel shares initially rose around 6% during trading on Friday, before later settling at the close. US Commerce Secretary Howard Lutnick described the deal as a “historic agreement” beneficial to both Intel and the American people.
Intel confirmed the purchase of 433.3 million shares priced at $20.47 each, a discount on the current market price. The investment gives Washington nearly 10% ownership of the chipmaker without gaining board seats or any governance rights.
Around $5.7 billion from delayed CHIPS Act grants and $3.2 billion from defence awards will fund the equity. The CHIPS Act, introduced during the Biden presidency, provides government grants to boost domestic semiconductor manufacturing and technological innovation.
Earlier in the week, Intel announced that SoftBank would make a $2 billion investment in the chipmaker. This stake, which amounts to around 2% of the company, totalled roughly 87 million shares at $23 per share.
Why did the US buy a 10% Intel stake?
The deal brokered by the Trump administration to buy a 10% stake in Intel represents a rare private sector intervention. It is one of the largest equity purchases in a US technology company since the auto industry rescue 15 years ago.
During the Great Financial Crisis in 2008, the White House under George W. Bush took a majority stake in automaker General Motors, with the company about to enter into bankruptcy protection. The government later exited its position, incurring a loss of around $10 billion.
This latest investment serves to stabilise Intel, boost domestic semiconductor production, and secure critical technology supply chains. Intel in particular was highlighted as a key government target, with it being the only US-based company capable of advanced chip manufacturing.
Trump and Intel welcome the US investment
Upon announcing the historic agreement, Trump claimed the US “paid nothing for these shares, and the shares are now valued at approximately $11 billion.” The US president also posted: “This is a great Deal for America and, also, a great Deal for INTEL.”
In a press release, Intel CEO Lip-Bu Tan said he was “grateful for the confidence” the US government has placed in the company. He added: “We look forward to working to advance US technology and manufacturing leadership.”
Meanwhile, Lutnick was full of praise for the partnership, stating: “Intel is excited to welcome the United States of America as a shareholder, helping to create the most advanced chips in the world.
“As more companies look to invest in America, this administration remains committed to reinforcing our country’s dominance in artificial intelligence while strengthening our national security.”
This is not the first time Trump has reached a deal with major US semiconductor companies. Earlier in August, leading chipmakers Nvidia and AMD agreed to pay 15% from their chip sales in China to the government in exchange for export licenses.
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