Trump Administration Takes 10% Stake in Intel, Sparks Controversy Over CHIPS Act Funding

On Friday afternoon, Intel confirmed a partnership with the current administration, following President Trump’s assertion that the government would acquire a 10% equity in the ailing semiconductor manufacturer.

Contrary to Intel’s assertion that the government is investing $8.9 billion into Intel common stock, it appears the administration isn’t introducing fresh funds. Instead, they are merely fulfilling previously awarded but unpaid grants to Intel.

Specifically, the $8.9 billion is projected to originate from $5.7 billion in grants yet to be paid under the CHIPS Act, administered by the current administration, as well as an additional $3.2 billion granted through the Secure Enclave program, also led by the current administration.

In a post on his social network Truth Social, Trump stated, “No funds were expended for these shares.” Despite this, he characterized this move as “a stellar deal for America and, likewise, an exceptional deal for Intel.”

Trump has long criticized the CHIPS Act, labeling it a “terrible, disastrous policy” and urging House Speaker Mike Johnson to abolish it. In a corporate filing in June, Intel revealed that while it had already received $2.2 billion from the CHIPS Act funds, it subsequently sought an additional $850 million in reimbursement that remained unpaid by the government.

According to The New York Times, some financial experts and legal professionals question whether the CHIPS Act permits the conversion of grants into equity, potentially exposing this agreement to potential legal challenges.

Beyond his criticisms of the CHIPS Act, earlier this month Trump also accused Intel CEO Lip-Bu Tan of conflicts of interest and demanded his immediate resignation. However, on Friday, Trump expressed a more favorable view of Tan on Truth Social, stating that he “negotiated this deal with Lip-Bu Tan, the highly respected CEO of the company.”

In a statement, Tan acknowledged, “We are grateful for the faith the President and the Administration have placed in Intel, and we look forward to collaborating to strengthen U.S. technology and manufacturing dominance.”

Intel’s announcement clarified that the government’s investment will be passive in nature, without any board seats or other governance and information rights.