US Secretary of Commerce Howard Lutnick announced on Friday that Washington will acquire a 10% stake in Intel.<\/p>\n\n\n\n
\u201cThis historic agreement strengthens American leadership in semiconductors. It will grow our economy and protect our technological edge,\u201d Lutnick wrote on X. He shared the post with a photo of himself alongside Intel CEO Lip-Bu Tan.<\/p>\n\n\n\n
President Donald Trump confirmed the deal earlier in the Oval Office. He described it as \u201ca great deal for them.\u201d<\/p>\n\n\n\n
Shares of the Santa Clara-based chipmaker rose more than 5% on Friday.<\/p>\n\n\n\n
Intel confirmed that the US government will invest $8.9bn (\u00a36.6bn) in its common stock.<\/p>\n\n\n\n
Intel said the money will come from grants already approved but not yet delivered. This includes funds allocated under the CHIPS and Science Act, passed during President Joe Biden\u2019s administration.<\/p>\n\n\n\n
\u201cAs the only semiconductor company conducting leading-edge R&D and manufacturing in the US, Intel remains committed,\u201d Tan said. \u201cWe will ensure the world\u2019s most advanced technologies are American made.\u201d<\/p>\n\n\n\n
Tan praised Trump\u2019s focus on domestic chip production. He said it drives \u201chistoric investments in an industry vital for economic growth and national security.\u201d<\/p>\n\n\n\n
The CHIPS Act was designed to restore semiconductor manufacturing within the United States.<\/p>\n\n\n\n
Intel has faced difficulties expanding chip capacity. It lags behind Nvidia, whose market value has climbed past $4tn while Intel\u2019s remains near $100bn.<\/p>\n\n\n\n
Once a Silicon Valley powerhouse, Intel missed the rise of mobile technology. It also fell behind in artificial intelligence, where Nvidia now leads.<\/p>\n\n\n\n
Trump recently demanded Tan\u2019s resignation. He accused the Intel chief of having problematic ties to China.<\/p>\n\n\n\n
The president described Tan as \u201chighly conflicted\u201d over alleged investments in companies linked to the Chinese military.<\/p>\n\n\n\n
Tan rejected the accusations as \u201cmisinformation\u201d in a note to employees. He said he always acted within the law and ethical standards.<\/p>\n\n\n\n
Tan, a US citizen, was born in Malaysia and raised in Singapore. US law allows citizens to invest in Chinese firms.<\/p>\n\n\n\n
Trump\u2019s criticism followed a letter from Republican Senator Tom Cotton to Intel\u2019s board. Cotton questioned Intel\u2019s ability to safeguard taxpayer money and comply with security rules.<\/p>\n\n\n\n
After the dispute, Tan visited Trump at the White House.<\/p>\n\n\n\n
Press Secretary Karoline Leavitt described the stake as \u201ca creative idea that\u2019s never been done before.\u201d<\/p>\n\n\n\n
Reports said the Trump administration also required Nvidia and AMD to give Washington 15% of revenue from AI chip sales to China.<\/p>\n\n\n\n
Jacob Feldgoise, Senior Data Research Analyst at Georgetown University, compared the Intel stake to earlier government grant funding.<\/p>\n\n\n\n
\u201cIt serves the same purpose,\u201d Feldgoise said. \u201cIt shows stronger government involvement in markets to secure economic and security goals. The aim is regaining leadership in semiconductor manufacturing.\u201d<\/p>\n\n\n\n
The deal is rare today but has historical precedents.<\/p>\n\n\n\n
During the 2008 financial crisis, Washington took a majority stake in General Motors as bankruptcy loomed. The government later exited, taking a $10bn loss.<\/p>\n\n\n\n
Feldgoise noted that Trump\u2019s administration followed a similar approach earlier this year with MP Materials. The Nevada-based company mines rare earth metals.<\/p>\n\n\n\n
That agreement faced scrutiny after it emerged the Department of Defense relied on a Cold War-era law to bypass procurement rules.<\/p>\n\n\n\n
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