Washington, D.C. / Santa Clara, CA — August 22, 2025 — The U.S. government has officially taken a 9.9% ownership stake in Intel Corporation (NASDAQ: INTC), investing $8.9 billion in the struggling chip giant. The deal makes the federal government one of Intel’s largest shareholders as Washington doubles down on efforts to restore American leadership in the semiconductor industry and reduce dependence on overseas chip production.
Details of the $8.9 Billion Investment
Intel confirmed that the government purchased 433.3 million shares at $20.47 per share. The ownership will be passive, with:
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No board representation for the government.
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No governance or information rights beyond standard shareholder privileges.
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An agreement to vote with Intel’s Board of Directors on corporate matters.
The investment is funded by:
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$5.7 billion from unallocated CHIPS Act grants.
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$3.2 billion from the Secure Enclave program, which supports semiconductor security for U.S. defense applications.
In addition, Intel reaffirmed its commitment to providing secure, trusted chips for the U.S. Department of Defense.
Trump Administration’s Role and National Security Push
President Donald Trump announced earlier on Friday that his administration would secure a 10% stake in Intel, calling it a “great deal” for America. Hours later, Intel confirmed the final details.
Trump has made semiconductor reshoring a cornerstone of his economic policy, introducing tariffs, reshaping trade agreements, and steering billions in federal incentives toward U.S. chip manufacturing.
Intel CEO Lip-Bu Tan praised the investment, stating:
“President Trump’s focus on U.S. chip manufacturing is driving historic investments in a vital industry that is integral to the country’s economic and national security. We are grateful for the confidence the President and the Administration have placed in Intel.”
Intel’s Financial Struggles and Market Position
The deal comes at a critical time for Intel:
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Stock Performance: Intel’s market cap has fallen to $111 billion, less than half of its 2021 valuation.
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Layoffs & Cuts: CEO Lip-Bu Tan has slashed 15% of Intel’s workforce and shelved European expansion plans.
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Ohio Complex Delays: Intel’s flagship $20 billion Ohio chip plant faces further construction delays.
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Foundry Challenges: Intel is struggling to attract external customers to its foundry business, though it has secured contracts with Microsoft (MSFT) and Amazon (AMZN).
Despite these setbacks, Intel remains the only large-scale U.S. manufacturer of leading-edge chips, making it vital for national security and supply chain resilience.
Competition: Intel Trails AMD and Nvidia in AI Race
While Intel struggles, rivals AMD (NASDAQ: AMD) and Nvidia (NASDAQ: NVDA) have surged ahead in the AI chip race. Nvidia has become the world’s most valuable semiconductor company with dominance in AI GPUs, while AMD has gained share in data centers and PCs.
Intel, meanwhile, has been shut out of the AI boom, with its chips lagging in performance and innovation. Analysts warn that without breakthroughs in AI accelerators and foundry competitiveness, Intel risks further erosion of market share.
Intel’s Turnaround Plan: 18A Chip Technology & Foundry Push
Intel’s long-term revival hinges on two key strategies:
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18A Chip Technology – Intel’s next-generation node, designed to compete directly with TSMC and Samsung. Contracts with Microsoft and Amazon provide credibility, but Intel itself remains the foundry’s largest customer.
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Foundry Business Expansion – The U.S. government is backing Intel’s Integrated Device Manufacturing (IDM) 2.0 strategy, positioning the company as a geopolitical counterweight to Asian chipmakers.
As part of the deal, the U.S. government also received a five-year warrant to purchase an additional 5% of Intel shares at $20 per share, exercisable only if Intel’s foundry ownership drops below 51%.
Market Reaction
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Friday: Intel stock rose 5.5% after Trump’s announcement.
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After-Hours: Shares slipped 1% once final deal details were disclosed.
SoftBank also revealed a $2 billion investment in Intel earlier this week, suggesting global investors see potential in the company’s turnaround plan despite its ongoing struggles.
Bottom Line
The $8.9 billion U.S. government investment in Intel underscores Washington’s determination to safeguard America’s technological edge and strengthen domestic chip manufacturing.
While Intel faces steep challenges — from lagging in the AI race to delayed factories and market share losses — its role as the only advanced U.S.-based chipmaker makes it indispensable. The deal could stabilize Intel financially, but investors will want to see tangible progress in 18A technology adoption, foundry competitiveness, and AI innovation before confidence fully returns.
