The US government may take a 10% stake in Intel, making it its largest shareholder

The Trump administration is considering a plan to acquire a 10% stake in Intel Corp., which would make the US government the chipmaker’s largest shareholder.

People familiar with the talks said the proposal could convert billions in federal grants into equity. The initiative is part of Washington’s broader push to strengthen domestic semiconductor production and reduce reliance on foreign suppliers.

Washington weighs taking direct ownership in Intel as equity shift looms

Intel has been one of the biggest beneficiaries of the Chips and Science Act, securing $10.9 billion in federal grants to boost commercial and military chip production.

Officials are weighing whether to convert some or all of that funding into equity. At the current market value, a 10% stake in Intel would be worth about $10.5 billion. The deal, if it happens, would be a significant one. It would result in a government that transacts not just by handing out subsidies but by owning a critical technology company directly.

However, three people familiar with the talks said the administration is still reviewing the legal, financial, and national security implications. A White House spokesman declined to comment on the president’s private conversations with foreign leaders and said, “No deal is official until it is announced.”

Wall Street took immediate notice of the potential investment. Intel shares fell nearly 4% in Monday trading, reversing some of the big gains from last week. The stock had surged 23% in its best weekly gain since February.

Investors appear divided. Some see the plan as a backdoor bailout for a company that has faced production delays and increasingly fierce competition from other manufacturers like Taiwan’s TSMC and South Korea’s Samsung.

Analysts warn, however, that owning equity will do little to solve Intel’s deeper challenges. The company is still behind in more advanced chip design, and global giants in Asia are taking the lead.

US pushes to secure chip future with potential equity stake in Intel’s Ohio fabs

The discussions between the Trump administration and Intel indicate the administration’s resolve to revitalize America’s semiconductor industry. Washington has long worried about the country’s heavy reliance on Asian chipmakers, especially TSMC of Taiwan and Samsung of South Korea, which dominate advanced production.

The “Silicon Heartland” project, sprawling across Ohio, would be the linchpin to the rebirth of American manufacturing. Promised with great fanfare in 2022, the $28 billion facility had been billed as the largest chip factory project in the country’s history. The project has since been dogged by year after year of delays, mounting construction costs, and uncertainty about whether and when government grants would come through.

Some analysts say that could change with a direct government stake. With the US as the major shareholder, federal funding can flow more quickly, cutting through red tape and providing Intel with the capital it needs to expedite construction. It might also calm investors’ worries that Washington is not fully committed to getting the Ohio fabs over the finish line.

This is not an entirely new strategy. Last month, the Pentagon made a $400 million equity investment in MP Materials, a California rare-earth company. That deal left the United States government as the company’s majority shareholder, meaning America’s access to rare-earth minerals, crucial to military technology, is more secure.

Those behind a comparable maneuver for Intel counter that chips are every bit as strategic as rare-earths, if not more so. They say that Washington cannot afford to let Intel falter, particularly as China is funneling billions into its chip industry to reduce its reliance on the West.

KEY Difference Wire helps crypto brands break through and dominate headlines fast