Trump Says Intel to Share 10% of Chipmaker Profits
U.S. Government takes $10 Billion Stake in Intel, Signaling New Era of Industrial Policy
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A Shift in U.S.-Tech Relations
In a move signaling a more interventionist approach to bolstering domestic manufacturing, the Trump governance has secured a 10% equity stake in semiconductor giant Intel, valued at approximately $10 billion. The agreement, announced Friday, August 22, 2025, stems from grant funding previously allocated to Intel under the CHIPS and Science Act, passed during the Biden administration to incentivize domestic chip production.
President Trump described the arrangement as a direct result of his administration’s assertive negotiations, stating, “They’ve had some bad management over the years and they got lost. I said ’I think you should pay us 10% of your company,’ and they said ’yes.’ That’s about $10 billion. I don’t get it, this comes to the United States of America.” The announcement, made during a press conference in the oval Office, underscores a willingness to demand financial returns on government investments in key industries.
From Grants to Equity: A New Model for CHIPS Act Funding
Originally, Intel was slated to receive around $11 billion in grants through the CHIPS Act to expand its manufacturing capabilities within the United States. Though, the new agreement, as reported by the New York Times, shifts the dynamic, with the government receiving equity in exchange for the grant money. crucially, the government will not seek a role in intel’s day-to-day governance or a seat on the company’s board.
Commerce Secretary Howard Lutnick had previously signaled this shift in strategy,telling CNBC that the government “should get an equity stake for our money, so we’ll deliver the money which was already committed under the Biden administration.” This move represents a departure from conventional grant-based funding models and positions the U.S. government as a direct investor in a critical technology sector.
A Complex Path to Agreement
The deal wasn’t without its complexities. President Trump revealed that he had previously called for the resignation of intel CEO Lip-Bu Tan, following concerns raised by Senator Tom Cotton (R-Ark.) regarding Tan’s business ties to Chinese companies. Trump publicly addressed the issue on his Truth Social platform, prompting Tan to travel to Washington for a meeting with the president last week. “He walked in wanting to keep his job and he ended up giving us $10 billion for the American people,” Trump stated.
broader Trends in U.S. Economic Intervention
The Intel agreement is part of a broader pattern of increased U.S. government intervention in private sector deals. Earlier this year, the administration secured a “golden share” in the merger between Nippon Steel and U.S. Steel, granting it veto power over key decisions. Furthermore, the U.S. recently established a revenue-sharing agreement with Nvidia and AMD, taking 15% of sales generated from AI chip exports to China, as reported by Fortune. Treasury secretary scott Bessent has indicated that similar arrangements could be extended to other industries.
Political Reactions and Future Implications
The move has drawn criticism from some Republicans,including Senator Rand Paul (R-Ky.), who expressed concerns on X (formerly Twitter) that government ownership in a private company could be a step towards socialism. Despite this opposition, President Trump remains resolute, stating his administration will continue pursuing such deals provided that they don’t compromise U.S. national security.