US to Take 10% Equity Stake in Intel: Trump’s Bold Corporate Move
The connection between technology and politics always makes headlines, and the same has happened this time too. The US taking a 10% equity stake in Intel is such news, which is not only important for the tech industry but can also have a big impact on the global economy. Donald Trump’s latest corporate move has once again surprised everyone, as this is an extraordinary intervention that directly tries to reshape America’s chip industry.
US to Take 10% Equity Stake in Intel for $8.9 Billion
According to the agreement, America has decided to purchase 9.9% of shares of Intel, whose total value is $8.9 billion. The deal was struck at $20.47 per share, which is almost a $4 discount from Intel’s Friday closing price of $24.80. Meaning the government has bargained and taken a cheap stake. To buy these 433.3 million Intel shares, the Trump administration has used $5.7 billion of unpaid grants from the CHIPS Act and $3.2 billion from the Secure Enclave program.
After this announcement, Intel’s stock saw a slight upward movement. In regular trading, the stock closed 5.5% higher and in the extended session, it rose another 1%. This clearly shows that market investors are considering Trump’s corporate move as a positive signal.
Trump’s Strategic Move with Intel CEO Lip -Bu Tan
Another interesting angle of this deal is the relationship between Trump and Intel’s new CEO, Lip-Bu Tan. A few weeks ago, Trump had criticized Tan and even demanded his resignation over his ties with Chinese firms. But now Trump has written a new chapter by meeting with him. A White House official confirmed that the meeting between Trump and Tan was productive. Trump himself said, “He came to save his job, but he gave us $10 billion.”
Commerce Secretary Howard Lutnick also called the deal “fair to Intel and fair to the American people.” This clearly shows that Trump is trying to create a corporate-politics balance so that America’s tech future can be secured.
US to Take 10% Equity Stake in Intel Amid Corporate Interventions
The Intel deal is not just an isolated step. The Trump administration has made some unusual corporate interventions in the past. For example, in the case of Nvidia’s AI chips, a deal in which the US gets a 15% share of China sales of its H20 chips. Similarly, the the Pentagon decided to become a major shareholder in MP Materials and the government got a “golden share” in the deal between Japan’s Nippon Steel and US Steel.
Now Intel’s case is a little different because the chip industry is already going through a crisis phase. Japan’s SoftBank has also decided to invest $2 billion in Intel, but experts say that money alone cannot solve Intel’s fundamental problems. Industry experts like Daniel Morgan say that it will be difficult to sustain Intel’s foundry business without government support.
Intel’s Future After US Government Stake
Intel has clarified that the US government’s stake will be a passive ownership, that is, they will not have any board seat. The government will have to align with Intel’s board in shareholder votes, except for some limited exceptions. But interestingly, the deal also includes a five-year warrant under which the US can acquire 5% additional Intel stock if Intel loses control of its foundry business in the future.
Now the question is, could this deal be a fresh start for Intel?
Analysts say the federal backing will give Intel some breathing space to revive its loss-making foundry unit. But the truth is that Intel has already ceded the AI market to Nvidia and is also lagging behind AMD in the CPU segment. In 2024, Intel recorded an annual loss of $18.8 billion, the first time since 1986. The company’s last positive free cash flow was in 2021.
Lip-Bu Tan, who became CEO in March, now has a big responsibility to make Intel an industry leader once again. But this will not be an easy task, as Intel has to cover the technology gap with companies like TSMC and attract new customers.
Conclusion: What the Deal Means for America and Intel
In today’s world, technology is not just a matter of economic strength but also of security for a nation. US to take 10% equity stake in Intel is such an extraordinary deal that tries to give America a strong position in the chip industry. This is a bold step by Trump which reflects his “America First” vision.
This deal can become a lifeline for Intel, but success will depend on how the company tackles its fundamental challenges. If Intel revives its foundry business and makes a comeback in the AI market, then this deal can prove to be a game-changer. Otherwise it will just remain another political headline.
Disclaimer:
This article has been written for informational purpose only. The financial or political details given in it are based only on news reports. For any investment or financial decision, you should take advice from your advisor.
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