US Government Acquires 10% Stake in Intel with $5.7 Billion Investment

Intel has received a $5.7 billion cash infusion from the U.S. government under a deal brokered by President Donald Trump, which grants the government a 10% stake in the struggling chipmaker as part of the CHIPS Act. The agreement includes a five-year warrant for an additional 5% stake if Intel’s ownership of its foundry business falls below 51%, though Intel’s CFO David Zinsner expressed confidence that the company will maintain majority control and expects the warrant to expire worthless. Intel is separating its foundry division from its chip design business and is considering strategic outside investment for the foundry, but this is years away. The government’s investment aims to incentivize Intel to bolster its contract manufacturing operations amid competitive pressures and the need to secure significant orders for its next-generation 14A chip manufacturing technology. Despite the government becoming the largest shareholder with this investment, it remains a passive stakeholder with no governance rights. This move marks a notable shift in U.S. government intervention in private industry, reflecting President Trump's more hands-on approach to domestic technology and manufacturing sectors.