Trump Administration Acquires 10% Stake in Intel, Signaling Increased Government Control

The Trump administration announced on Friday that it had acquired a 10% stake in Intel, marking a significant step by the former President to assert federal government influence over a private company. The United States will not seek direct representation on Intel's board and will generally vote with the current Board of Directors on shareholder matters, with some exceptions. This move coincides with the ongoing competition between the United States and China in the artificial intelligence sector.

Trump also publicized the deal on his social media platform, praising the company's CEO. He stated that the United States now fully owns and controls 10% of Intel, highlighting the deal as beneficial for both the country and the company. He mentioned that the shares were acquired without any financial outlay from the United States and are currently valued at approximately $11 billion.

This action is unusual, especially considering the absence of an economic crisis. While the U.S. has held temporary stakes in companies during past financial crises, this move deviates from that precedent. A 2003 Congressional study cautioned that such government involvement could expose taxpayers to increased risk.

The stake will be financed through existing grants awarded to Intel under the 2022 U.S. CHIPS and Science Act, along with funds from a program called Secure Enclave. Including prior CHIPs grants, the total investment amounts to approximately $11.1 billion, representing about 9.9% of Intel's market value.

Trump's actions continue to challenge established norms regarding the relationship between government and business, departing from the free-market principles traditionally favored by both major U.S. political parties. He recently persuaded chipmakers Nvidia and AMD to share a portion of their China sales revenue with the U.S. government in exchange for export licenses.

While these companies have benefited from the artificial intelligence boom, Intel has faced challenges in recent years, with its stock price declining significantly. Amid the ongoing artificial intelligence competition and the prioritization of computer chip production as a national security matter, Trump officials have focused on Intel to enhance U.S. control over semiconductor manufacturing.

Additionally, Japan’s SoftBank announced a $2 billion investment in Intel to support advanced technology and semiconductor innovation in the United States. Some Democrats have expressed support for the move, emphasizing the importance of U.S. leadership in both the economy and national security.