US Government Buys 10% Stake in Intel Amid Chip Race

Picture Credit: Reuters

The US government will acquire a 10% stake in Intel, marking one of the most direct federal interventions in the tech sector in years. Commerce Secretary Howard Lutnick announced the deal on Friday, calling it a “historic agreement” to secure America’s leadership in semiconductors.

The $8.9 billion investment, revealed by President Donald Trump in the Oval Office, will be funded through grants already allocated under the Biden-era CHIPS and Science Act but not yet disbursed. Intel shares jumped more than 5% on the news.

Intel CEO Lip-Bu Tan welcomed the move, saying the company remains committed to ensuring that the most advanced chips are manufactured in the US. The agreement comes at a pivotal time: Intel has fallen far behind rival Nvidia, whose dominance in artificial intelligence has lifted its market cap above $4 trillion, compared with Intel’s $100 billion.

The deal also follows weeks of tension between Trump and Tan. The president recently accused Tan of having “conflicted ties” to China, echoing concerns raised by Senator Tom Cotton. Tan has rejected those claims as misinformation and defended his record of compliance with US laws and ethics standards.

Analysts describe the equity purchase as unusual but not without precedent. The US government previously took stakes in General Motors during the 2008 financial crisis and in MP Materials, a rare-earth supplier, earlier this year. By holding equity rather than just granting subsidies, Washington is signaling a willingness to play a more active role in securing the nation’s technological future.

For Intel, the backing could provide both capital and political breathing room as it races to regain ground in chipmaking—a sector increasingly tied to economic security and global power.