US to acquire 10% stake in Intel under Trump’s latest corporate push

The US government has made a 10% equity interest in Intel, and it is the audacious step taken yet by President Donald Trump in the restructuring of US corporate America. The transaction values the CHIPS Act grants at an estimated risk of $8.9 billion dollars and will turn unpaid grants into stock, giving Washington a stake in the largest chipmaker in the country. The move signifies the extent to which the US government has become committed to ensuring the US semiconductor industry is secure, as it is currently the center of global competitive dynamics.

Trump justified the agreement as a win to the American taxpayers, with very little option facing new Intel CEO Lip-Bu Tan to agree with the deal. The resignation is also after intense relations between the white house and the Tan in the last weeks when Trump publicly requested his resignation due to his association with Chinese companies. In reaching this deal both parties have met somewhere in the middle at least temporarily.

Why Federal Support is Important to Large Corp like Intel

Intel has long suffered. Long the leader in the chipmaking industry, it has been outstripped in advanced chip manufacturing by the Taiwanese company TSMC, and in artificial intelligence processing by Nvidia. In 2024, Intel recorded an $18.8-billion loss, the company has first since 1986. The company has also not attracted sufficient customers in its new factories thereby leaving the foundry business under pressure.

Analysts note that more than money, Intel problems go deep. Despite the abundance of funding, the company needs to make up technologically in order to regain its customers. Daniel Morgan of Synovus Trust remarked that the Intel foundry unit requires not only cash but also competitive advantage which will require years to develop. The government subsidy provides Intel more space to make an overturning effort.

How the Deal Can Work

The simple agreement is that the US will buy $433 million of Intel shares at the price of $20.47 each, a lower price in comparison with the Friday close price of $24.80. This has indicated that taxpayers are purchasing below the market, and the administration has portrayed this as a success. Intel also gave Washington a five-year option to purchase another 5% of the company at $20 in the event it loses time of control over its foundry unit.

The arrangement is in the form of passive ownership. The government will have no board seat, but it needs to vote alongside the Intel board on a majority of decisions involving shareholders. This structure leaves the management of Intel out of the hands of the government, and the government still, nonetheless, has a trend about money and policy influence on the company.

A Wider Tendency of Action

The stake of Intel is not an independent one other scheme that has been approved by Trump on unorthodox government business deals with the private businesses. The Pentagon made MP materials, a rare earth miner, the largest shareholder. The US too got a golden share in the U.S. Steel as part of the takeover deal by Nippon Steel. Earlier this month, the US gave a license to Nvidia to sell some of its AI chips to China at the cost of 15% of the sales.

Critics denounce that these interventions erase the boundary between government and business, posing new risks to investors. Those in favor claim that this is needed to assure supply chains, avoid jeopardizing national security and to maintain control of critical industries.

What It Holds for the Chip Race

In the case of Intel, government support can ensure plants stay on the ground and employees are retained as it seeks to stay above its competitors. Granting leadership back will not be a walk in the park, though Nvidia is a market leader in artificial intelligence chips. In contrast, AMD has increased its market share in central processors. In the meantime, TSMC is a step ahead in the most advanced manufacturing technology.

The new CEO at Intel has the responsibility to reclaim the status of the company as a technological leader. The pressure will only increase with Washington taking giant shares. The fate of this transaction will not only have an impact on the way forward of Intel but the overall attempt of the US to recapture global leadership in the chip war.The US government does not have to sell its 10% shareholding in Intel as a mere pecuniary transaction. It is an indicator of a new age of point-blank involvement by the state in the most strategic areas of corporate America. In the case of Intel, it offers the much-needed cash and time to heal. In the case of Washington, it obtains a presence in a strategic industry.

However, the dangers are still big in the event that Intel does not manage to turn around, the U.S. government will have billions of shares in the stock of an aching giant. The years ahead will tell whether this risky venture reinforces the technological competitiveness of America or is more of an eye opener on what the government should not do with businesses.