Intel Secures U.S. Investment Amid Leadership Concerns
WASHINGTON — President Donald Trump announced on Friday that the U.S. government has acquired a 10% stake in the technology giant Intel, just weeks after raising questions about the company’s CEO, Lip-Bu Tan.
In a post, Trump declared, “The United States of America now fully owns and controls 10% of INTEL, a Great American Company that has an even more incredible future.” This stake was secured through the conversion of $11.1 billion in previously pledged funds, resulting in the government gaining 433.3 million shares priced at $20.47 each, significantly lower than Friday’s market price of $24.80.
This development makes the government one of Intel’s largest shareholders during a challenging period for the California-based company, which has announced layoffs of over 20,000 employees in an effort to recover from years of strategic missteps.
CEO Lip-Bu Tan, who has been in his role for just over five months, faced scrutiny earlier this month from lawmakers concerned about his prior investments in Chinese firms. Trump highlighted these issues in early August, calling for Tan to resign. However, after Tan publicly expressed his commitment to the U.S. and met with the President, Trump praised him as a “highly respected” leader.
In his statement, Tan acknowledged Trump’s support, emphasizing the vital investments being made in a critical industry. “We are grateful for the confidence the President and the Administration have placed in Intel,” he stated, signaling a commitment to advancing U.S. technology leadership.
Though Intel’s current stock is slightly above the price at which Tan was hired, it is still considerably down from its peak of around $75, reached 25 years ago. The company, valued at about $108 billion, faces stiff competition from Nvidia, which boasts a market cap of approximately $4.3 trillion.
The U.S. stake in Intel comes through government grants facilitated by the CHIPS and Science Act, introduced under President Biden to promote domestic chip manufacturing and reduce reliance on foreign suppliers. However, the Trump administration perceives these actions as an unnecessary expenditure but aims to turn a profit from the funding already allocated to Intel.
Commerce Secretary Howard Lutnick noted, “We think America should get the benefit of the bargain.” While $7.8 billion has been pledged to Intel, only $2.2 billion has been funded.
Critics, however, have raised concerns about the implications of government ownership in a private entity, suggesting that it could influence market dynamics and stifle competition. Some experts fear that the deal might compel other tech companies to source chips from Intel as a means of gaining favor with the administration.
Investor Nancy Tengler expressed skepticism regarding the value of this government investment, emphasizing the need for the private sector to operate independently from government interference. “Let the government get back to the business of government,” she remarked.
Historically, it is not uncommon for the government to take significant equity stakes in major companies, as seen during the Great Recession with General Motors, which resulted in substantial financial losses for taxpayers.
Trump’s investment in Intel aligns with his broader strategy of boosting American production and maintaining technological superiority, particularly in the race to innovate in artificial intelligence and reduce dependency on foreign chip manufacturers.
Even prior to this investment, Trump had been utilizing his position to influence major tech companies, demanding that Nvidia and AMD pay a commission for their sales of chips in China to secure export licenses.
As the situation unfolds, all eyes will be on Intel’s performance and the repercussions of this unprecedented government involvement in a key player of the tech industry.
