Intel Corporation’s stock spiked by nearly 6%. This increase followed media reports indicating that the Trump administration is poised to announce an equity stake in the semiconductor colossus. The President made this announcement alongside President Donald Trump, letting slip that the government was negotiating to buy about 10% of Intel. He’s convinced this action will pay dividends in both directions. As the largest employer in their home state of Oregon, Intel is facing one of the thorny realities of market competition. Its present-day market capitalization is over $100 billion.
The news comes on the heels of yesterday’s meeting between Intel’s new CEO Lip-Bu Tan and President Trump at the White House. During the meeting, they considered the option of the federal government taking an equity stake in the company. This is a remarkable reversal of decades of U.S. industrial policy regarding tech companies. Trump emphasized that “they’ve agreed to do it and I think it’s a great deal for them.”
Smart money investor SoftBank announced a $2 billion mega-fund investment in chipmaker Intel earlier this week. This investment represents close to 2% of Intel’s current value, in addition to the government’s stake. This investment is apparently meant to sharpen Intel’s competitive edge in the semiconductor industry. This is an encouraging development that comes in the wake of increased competition and changing market conditions. A White House official told me that conversations with Intel will remain ongoing. They emphasized that while progress has been made, so far no final decisions have been placed on the table.
Intel’s had a rough go of things over the last few years. In a bid to counter this, CEO Lip-Bu Tan told employees in a memo last July that the company would stop issuing “blank checks.” Meanwhile, Intel is delaying construction on its mega-factory complex in Ohio. We believe that this decision is an example of the Senate’s increasingly careful fiscal approach, shaped by today’s challenging market realities.
Howard Lutnick, the company’s chairman and CEO, pointed out that the proposed government stake will be nonvoting. This hybrid strategy would enable the federal government to subsidize Intel’s new factories while letting the company freehandedly make its operational decisions. The funding commitment from the U.S. government is rooted in the CHIPS Act passed in 2022 under the Biden administration, aimed at strengthening domestic semiconductor manufacturing and innovation.
Actual impact Trump sought to build the premise for the announcement by insisting that the money Intel is receiving complies with promises from the Obama administration. This adjustment solidifies bipartisan progress to advance U.S. advantage in technology and manufacturing.