US Government in talks to take 10% stake in Intel

The US government is in talks to acquire a 10% stake in semiconductor giant Intel, a move confirmed by the White House.

This highly unusual deal, which could involve converting federal grants into shares, aims to put American interests first from a national security and economic standpoint.

The potential agreement is a direct response to Intel’s struggle to keep pace with global rivals like Samsung and TSMC in the competitive chip market, particularly for AI applications.

Commerce Secretary Howard Lutnick stated that the government wants an equity stake in return for its financial support, rather than simply giving out grants. The funds would help Intel build a new flagship manufacturing hub in Ohio.

The decision reflects the Trump administration’s focus on securing domestic production of critical technologies such as semiconductors. As Vincent Fernando from investment consultancy Zero One told the BBC, the government wants to avoid reliance on foreign suppliers for key industries like chip manufacturing.

The deal, which comes on the heels of Japanese firm Softbank buying a separate $2 billion stake in Intel, is a clear sign of Washington’s determination to see the company succeed and protect the nation’s supply chain.

Despite the potential benefits, some analysts have raised concerns. While partial state ownership is not unprecedented, such as during the global financial crisis, experts, including Professor Kevin J. Fox from the University of New South Wales, Sydney describe this move as “extremely unusual.” Fox notes it could complicate Intel’s business operations and potentially deter other companies from accepting government grants in the future due to the added “uncertainty.”