This story has been updated since it was first published.
Even the Trump administration’s most vigorous opponents must admit that when the President and his minions want something to happen, it happens, and quickly. Just a week after initial reports suggested the seemingly wild notion that the US government was discussing taking a stake in Intel, it is a done deal, according to US Secretary of Commerce Howard Lutnick.
After President Trump earlier on Friday told reporters that Intel had “agreed” to a deal, other government officials appeared to hedge, and said only that Intel CEO Lip-Bu Tan was due to meet with the administration later in the day, according to published reports. However, minutes after markets closed, Lutnick posted on X: “The United States of America now owns 10% of Intel, one of our great American technology companies.”
The stake was initially reported to be worth about $10 billion at Intel’s valuation of $100 billion, though Intel late Friday issued a statement describing it as an $8.9 billion investment. The statement added, "The government’s equity stake will be funded by the remaining $5.7 billion in grants previously awarded, but not yet paid, to Intel under the U.S. CHIPS and Science Act and $3.2 billion awarded to the company as part of the Secure Enclave program. Intel will continue to deliver on its Secure Enclave obligations and reaffirmed its commitment to delivering trusted and secure semiconductors to the U.S. Department of Defense. The $8.9 billion investment is in addition to the $2.2 billion in CHIPS grants Intel has received to date, making for a total investment of $11.1 billion."
The agreement between the federal government and Intel calls for the former to purchase 433.3 million primary shares of Intel common stock at a price of $20.47 per share, well under the $24.80 per share Friday closing price of Intel's stock. "This investment provides American taxpayers with a discount to the current market price while enabling the U.S. and existing shareholders to benefit from Intel’s long-term business success," the statement said.
As reports of talks between the Trump administration and Intel circulated in recent days, many observers wondered if the investment could lead to the government having an influential voice in the company. Intel's statement dismissed that possibility, offering, "The government’s investment in Intel will be a passive ownership, with no Board representation or other governance or information rights. The government also agrees to vote with the Company’s Board of Directors on matters requiring shareholder approval, with limited exceptions."
Among other details, the federal government will receive a five-year warrant, at $20 per share for an additional 5% of Intel common shares, "exercisable only if Intel ceases to own at least 51% of the foundry business." The statement added, "The existing claw-back and profit-sharing provisions associated with the government’s previously dispersed $2.2 billion grant to Intel under the CHIPS Act will be eliminated to create permanency of capital as the company advances its U.S. investment plans."
Intel stock jumped about 5% on Friday as reports of a deal circulated.
Intel and the Trump administration were first reported to be discussing a government investment just a week earlier, not long after Trump demanded Tan’s resignation.
The announcement of the investment also came just a few days after Intel announced that SoftBank was investing $2 billion in the company via a direct purchase of common stock.