SAN FRANCISCO (AP) — In a bold and controversial move, the Trump administration is pushing to acquire a 10% stake in Intel, one of America’s most iconic tech giants. This strategic pivot follows SoftBank’s recent $2 billion investment in the company, marking a significant realignment in both the U.S. government’s relationship with the semiconductor industry and President Donald Trump’s technology policy.
With U.S. Commerce Secretary Howard Lutnick confirming the negotiations, the proposed deal would see the federal government converting Biden-era grants into equity, effectively placing the U.S. government among Intel’s largest shareholders.
This unprecedented shift raises questions about government involvement in private enterprise, global competition in semiconductors, and the implications for U.S. tech policy moving forward.
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1. The Background: SoftBank’s $2 Billion Intel Bet
SoftBank, the Japanese investment conglomerate known for high-stakes tech plays, shocked markets with its $2 billion investment in Intel earlier this month. The move signaled a vote of confidence in the struggling chipmaker, which has faced fierce competition from NVIDIA, AMD, and TSMC in recent years.
SoftBank’s investment is widely seen as a bet on Intel’s future in AI chips, data centers, and foundry services, sectors that are expected to grow exponentially in the coming decade.
This high-profile move appears to have influenced the Trump administration’s own positioning toward Intel, prompting the U.S. government to seek a more direct role in the company’s future.
2. Trump Administration’s Move: A Strategic Pivot
In an interview with CNBC, U.S. Commerce Secretary Howard Lutnick confirmed that the government is in active negotiations with Intel to acquire a 10% stake.
“We think America should get the benefit of the bargain,” Lutnick said. “It’s obvious that it’s the right move to make.”
This marks a dramatic pivot for the Trump administration, which has traditionally championed free-market capitalism and criticized government overreach. The move also follows Trump’s earlier efforts to oust Intel’s CEO, making the current engagement appear even more unexpected.
According to sources close to the negotiations, the deal is being framed as strategic industrial policy aimed at securing America’s dominance in semiconductor manufacturing and protecting national security interests.
3. The Mechanics of the Deal: Grants for Equity
The deal reportedly involves converting federal grants—initially allocated under President Joe Biden’s CHIPS and Science Act—into equity shares in Intel.
Instead of issuing funds as traditional subsidies, the Trump administration plans to restructure these investments to yield partial ownership. This would:
- Give the government a seat at the table in Intel’s strategic direction.
- Help ensure that taxpayer money results in tangible returns.
- Support broader Made-in-America semiconductor initiatives.
This model has been compared to historical efforts during World War II, when the U.S. government heavily invested in industries critical to national security.
4. Why Intel? Understanding the Stakes
Intel remains a pillar of American tech innovation, even as it has fallen behind its global competitors in recent years.
Reasons Behind Targeting Intel:
- American legacy brand with over 50 years of history.
- One of the few U.S.-based companies still manufacturing chips domestically.
- A key player in the emerging AI and quantum computing sectors.
- Crucial to defense and critical infrastructure supply chains.
Intel is also central to the CHIPS Act and the ongoing effort to onshore semiconductor production to reduce dependence on foreign manufacturers like TSMC and Samsung.
5. A Reversal in Trump’s Stance on Intel Leadership
Not long ago, Trump publicly criticized Intel’s leadership, particularly CEO Pat Gelsinger, for what he described as “weak execution” and “falling behind China.” There were even behind-the-scenes attempts to pressure the board into a leadership shake-up.
However, the current 10% stake proposal suggests a change in tone and strategy, with Trump now seeking partnership instead of confrontation.
Political analysts see this as a pragmatic recalibration, likely driven by shifting geopolitical dynamics and the need to show strong leadership on economic and tech fronts ahead of the 2026 election cycle.
6. National Security and Tech Sovereignty
One of the central arguments behind the administration’s push for a stake in Intel is national security.
With rising tensions between the U.S. and China, semiconductors have become the geopolitical oil of the 21st century. Chips are not just essential for smartphones and computers—they’re critical to:
- Military hardware
- Satellites and defense systems
- Infrastructure security
- AI and surveillance technologies
By securing a significant stake in Intel, the U.S. government is attempting to safeguard its technological edge and reduce reliance on foreign suppliers, especially as China accelerates efforts to develop its own semiconductor industry.
7. Market Reactions and Investor Sentiment
Wall Street has responded with mixed reactions to the news of a possible government stake in Intel.
Positive Outlook:
- Investors see the move as strong backing for Intel’s future.
- It may boost Intel’s access to government contracts and federal R&D support.
- Confidence from both SoftBank and the U.S. government could lift long-term valuations.
Concerns:
- Some analysts worry about government interference in corporate decision-making.
- Critics point to the risk of politicizing innovation and boardroom strategy.
- The unorthodox structure of the deal raises regulatory and legal questions.
Intel’s stock saw a 2.8% increase in after-hours trading following Lutnick’s interview, though gains were modest amid broader market uncertainty.
8. Intel’s Challenges in a Changing Market
Intel is no longer the undisputed leader in the chip industry.
Challenges:
- Lagging in manufacturing nodes compared to TSMC.
- Losing market share in CPUs to AMD and Apple Silicon.
- Delayed product rollouts and supply chain issues.
- Heavy capital expenditure with uncertain ROI.
However, the company is doubling down on its foundry business, aiming to compete with global leaders in contract chip manufacturing. The hope is that federal backing can help Intel fast-track investments and regain its competitive edge.
9. Global Chip War: U.S. vs. China
This move is also part of a larger semiconductor cold war between the United States and China.
- The Biden and Trump administrations have both imposed export controls on advanced chip technology.
- China has responded by accelerating domestic chip development and banning U.S. hardware in certain sectors.
- Both nations are investing billions of dollars to secure supply chains and lead the AI revolution.
By acquiring a significant stake in Intel, the U.S. would be taking a bold step toward controlling a vital player in this global contest.
10. What This Means for the Future of U.S. Tech Policy
The Trump administration’s move could set a new precedent for how the U.S. government engages with key industries in the future.
Potential Impacts:
- A shift toward state capitalism in strategic sectors.
- Reimagining how public funds are allocated—not just as subsidies, but as investments.
- A growing trend of public-private partnerships in defense, infrastructure, and AI.
Risks and Considerations:
- Balancing innovation with oversight.
- Ensuring political neutrality in corporate governance.
- Maintaining global investor confidence.
Regardless of how the deal unfolds, one thing is clear: the lines between government and industry are blurring, especially in sectors critical to national interest.
Frequently Asked Question
Why is the Trump administration seeking a stake in Intel?
The Trump administration is pursuing a 10% stake in Intel to strengthen U.S. control over semiconductor production, a sector critical to national security, economic stability, and technological competitiveness. The move is also seen as a response to growing global competition, especially from China, and a way to turn Biden-era federal grants into long-term equity investments.
How does SoftBank’s $2 billion investment in Intel relate to this move?
SoftBank’s recent $2 billion investment in Intel signaled renewed confidence in the chipmaker’s future, particularly in areas like AI, data centers, and foundry services. This high-profile backing is believed to have influenced the Trump administration’s decision to pursue a government stake, positioning the U.S. as a strategic investor alongside global financial players.
How will the U.S. government acquire Intel shares?
Instead of purchasing shares on the open market, the Trump administration plans to convert federal grants—originally allocated under the CHIPS Act—into Intel stock. This innovative approach would make the U.S. government one of the company’s largest shareholders without injecting new taxpayer funds.
Is this type of government involvement in private companies common?
No, it’s highly unusual for the U.S. government to hold a direct equity stake in a publicly traded tech company. While public-private partnerships exist, direct ownership is rare and typically reserved for wartime industries or in response to financial crises (e.g., the 2008 bailout of General Motors and AIG).
What are the national security implications of this deal?
Intel manufactures semiconductors vital to military systems, cybersecurity, AI, and critical infrastructure. By owning a stake in Intel, the U.S. government aims to secure its supply chains, reduce dependency on foreign chipmakers, and maintain its technological edge in global conflicts—particularly amid rising tensions with China.
How has Intel responded to the Trump administration’s interest?
Intel has declined to comment on the ongoing negotiations. However, the company has been a central player in the U.S. semiconductor revival and stands to benefit from increased government support, funding, and strategic alignment with national interests.
What does this mean for the future of U.S. tech policy?
If successful, this move could mark the beginning of a new era in U.S. industrial policy, where the government takes a more active investment role in critical technologies. It may also reshape how federal funding is deployed—favoring equity-based models over traditional subsidies or grants, especially in high-stakes sectors like AI, defense tech, and semiconductors.
Conclusion
The Trump administration’s bid to secure a 10% stake in Intel, following SoftBank’s $2 billion investment, signals a seismic shift in U.S. tech and economic policy. With national security, global competition, and industrial policy all intersecting, this move may reshape the future of the semiconductor industry—not just in America, but worldwide. While questions remain about how this government-corporate partnership will play out, the underlying message is clear: semiconductors are no longer just business—they’re strategy.