U.S. Government Invests $8.9 Billion in Intel to Boost Domestic Chip Manufacturing and National Security

Intel has announced a landmark agreement with the Trump Administration to strengthen American technology and semiconductor manufacturing leadership. Under the terms of the deal, the U.S. government will invest $8.9 billion in Intel common stock, marking a significant milestone in the nation’s efforts to rebuild domestic chip production and secure critical supply chains. The investment, funded by $5.7 billion in unused CHIPS and Science Act grants and $3.2 billion from the Secure Enclave program, brings Intel’s total government support under the CHIPS Act to $11.1 billion. This includes the previously awarded $2.2 billion in grants. The government will acquire 433.3 million shares at $20.47 per share, representing a 9.9% stake in the company. The purchase price reflects a discount to the current market value, offering taxpayers a favorable entry point while aligning public and private interests in Intel’s long-term success. The government’s ownership will be passive, with no board representation or governance rights. It will also agree to vote in line with Intel’s Board on shareholder matters, with limited exceptions. Additionally, the government will receive a five-year warrant to purchase an extra 5% of Intel’s shares at $20 per share, exercisable only if Intel no longer owns at least 51% of its foundry business. The agreement eliminates claw-back and profit-sharing clauses tied to earlier CHIPS Act grants, ensuring the capital remains permanent and fully dedicated to Intel’s U.S. expansion plans. This move reinforces the government’s long-term commitment to supporting domestic semiconductor innovation. Intel has invested over $100 billion in expanding its U.S. manufacturing and R&D operations since 2019, including $79 billion in research and development. The company’s new chip fabrication facility in Arizona, set to begin high-volume production later this year, will feature the most advanced semiconductor manufacturing technology available in the United States. CEO Lip-Bu Tan emphasized Intel’s unique role as the only company conducting leading-edge logic R&D and manufacturing within the U.S. He praised President Trump’s focus on domestic semiconductor leadership, calling the investment a pivotal step in securing national and economic security through American innovation. U.S. Secretary of Commerce Howard Lutnick highlighted the strategic importance of the partnership, stating it strengthens America’s position in artificial intelligence and national defense by ensuring trusted, secure semiconductors are made on American soil. The announcement has drawn strong support from major technology partners. Satya Nadella of Microsoft, Michael Dell of Dell Technologies, Enrique Lores of HP, and Matt Garman of AWS all commended the collaboration, underscoring the importance of a resilient U.S. semiconductor ecosystem for future technological advancement and national security. PJT Partners served as Intel’s exclusive financial advisor in the transaction. Intel remains committed to its long-term strategy of reinvesting in U.S. innovation, driving engineering excellence, and delivering cutting-edge chips. While the agreement marks a historic moment, Intel acknowledges the risks and uncertainties associated with large-scale capital investments, supply chain dynamics, global competition, and evolving regulatory environments. The company continues to navigate these challenges while advancing its mission to lead in semiconductor technology and American manufacturing.