Intel Receives $5.7 Billion US Government Investment, Secures 10% Stake

Intel has received $5.7 billion from the Trump administration as part of a deal in which the U.S. government acquired a 10% equity stake in the struggling chipmaker to prevent it from selling its contract manufacturing business, or foundry. This investment is a conversion of federal grants from the CHIPS Act and includes an additional 5% warrant that would activate if Intel sells more than 49% of its foundry business, aiming to keep the government involved in Intel's manufacturing arm. Despite recent losses and increasing competition from rivals like AMD, TSMC, and Samsung, Intel remains focused on retaining control over its foundry business, which has been a loss leader but is critical to its turnaround plans. The deal, proposed by President Trump and still being finalized by the Department of Commerce, has drawn mixed reactions and may face legal and public scrutiny. Intel's CFO David Zinsner indicated the company might consider external strategic investors in the foundry in the future but expects the government’s warrant to expire worthless. Alongside this, Intel has also secured a $2 billion investment from Japan’s SoftBank Group and is undergoing significant restructuring including layoffs and divestitures under CEO Lip-Bu Tan.