U.S. Government Acquires Significant Stake in Intel

In a landmark deal announced on Friday, August 22, the U.S. government acquired a 9.9% stake in Intel, one of the nation's most critical semiconductor companies. The agreement, which was confirmed by both Intel and the Trump administration, makes the U.S. government one of the largest shareholders in the tech giant. The investment is valued at $8.9 billion, a figure that, when combined with previously received grants, brings the total federal commitment to Intel to $11.1 billion.

The deal is funded by a conversion of previously awarded, but not yet disbursed, grants from the CHIPS and Science Act, which accounts for $5.7 billion of the total. An additional $3.2 billion from a separate "Secure Enclave program" also contributed to the investment. The U.S. acquired 433.3 million shares at a price of $20.47 per share, a notable discount to Intel's market price at the time of the announcement.

The move is considered a dramatic intervention in private enterprise, underscoring the government's push to strengthen domestic semiconductor manufacturing and reduce reliance on foreign supply chains. President Donald Trump praised the deal, stating that the U.S. "paid nothing for these shares" and that the stake was a "Great Deal for America." In a regulatory filing, Intel specified that the government's ownership will be passive, with no board representation or voting rights. However, the company also disclosed that the deal could pose risks to its business, including potential harm to its international sales and a reduction in the voting influence of existing shareholders.

The announcement follows a period of heightened tensions between the Trump administration and Intel, which had been sparked by the president's previous calls for Intel CEO Lip-Bu Tan's resignation over his business ties to Chinese firms. The deal was struck after Tan met with the president and represents a significant turnaround in their relationship. While the government's backing could provide Intel with financial stability, the deal also raises questions about the future of government involvement in private industry.

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