The US government will acquire a roughly 10% stake in Intel in exchange for settling $5.7bn in unpaid CHIPS Act grants and awarding $3.2bn for the Secure Enclave program. The equity stake could constrain Intel’s ability to obtain future government grants and complicate international sales, with 76% of Intel’s revenue from outside the US and 29% from China. White House economic adviser Kevin Hassett indicated the government could take equity stakes in other chip and AI firms, potentially including AMD or TSMC. President Donald Trump publicly endorsed making such deals for the country. CHIPS stands for Creating Helpful Incentives to Produce Semiconductors.
The United States government's 10 percent stake in Intel could harm international sales for the semiconductor chip giant. The company said in a securities filing on Monday that the new agreement could limit its ability to secure future government grants as White House economic adviser Kevin Hassett said that the US could take an equity stake in other companies in the artificial intelligence (AI) and chip industries. That could include Advanced Micro Devices or Taiwan Semiconductor Manufacturing.
Trump had previously demanded his resignation due to his previous investments in Chinese firms. As part of the looming deal, which is expected to close as early as Tuesday, the US government will buy Intel shares with $5.7bn in unpaid grants from the CHIPS Act passed by President Joe Biden in 2022. A further $3.2bn will be awarded to Intel for the Secure Enclave programme created by Biden under CHIPS.
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