Former president Donald Trump has suggested that the U.S. government should take an equity stake in Intel. He thinks this should be included in any new financial deal tied to the passage of the CHIPS Act. At the same time, Intel—the country’s largest semiconductor manufacturer—is in the midst of a crisis. As foreign competition has increased, the company has become ground zero for the administration’s efforts to target supportive intervention.
Trump’s assertion is clear: “Hey, we want equity for the money,” signaling a shift in strategy regarding how public funds are allocated to struggling companies. The Trump administration is looking at various ways to get financially involved with Intel. This program started with the Biden administration in 2022. Indeed, reports indicate that Intel’s stock shot up by 7% following confirmation of potential support from the Trump administration. This lift is indicative of the strong investor confidence in the company’s prospects.
Howard Lutnick, a key stakeholder in these ongoing debates, was a major Trump backer and advocate. He further highlighted the necessity of obtaining an equity position in exchange for federal investment. “We’ve got to get an equity position with our money,” he pronounced. He noted, for example, that taxpayers expect and deserve actual value in return for their hard-earned tax dollars. Lutnick emphasized that this deal would not provide the government with any governance or voting rights in Intel. Rather, it will ensure liquidity by turning already-made grant commitments into equity that will be of long-term benefit to American taxpayers.
Lutnick clarified that this is NOT a governance issue. Rather, we are forcing the Biden administration to turn half a bad grant into equity for the Trump administration and for America’s taxpayers. This approach leads to a stronger American manufacturing base. Secondly, it reduces our reliance on international rivals such as Samsung and TSMC, who both play a huge part in chip manufacturing.
The debate surrounding Intel’s money comes in the context of controversy and scrutiny. Now, for the second time, Trump is calling for the resignation of a key Intel representative. This decision comes in the context of increasing allegations of China-related malign connections and makes the negotiation playing field even more difficult.
Lutnick’s suggestion was an equity stake for the U.S. government. He recommended that Trump seek out similar financial agreements with other companies reaping the rewards of the CHIPS Act. This would be a huge precedent for the way we want federal investments to be structured in the future.
The water is definitely shifting at Intel. This comes after SoftBank has just taken a $1 billion, 2% stake in the company. This move makes SoftBank Intel’s fifth-largest shareholder and underscores the rising interest from all types of investors in the semiconductor sector.