• The Trump administration is actively negotiating to convert a portion of Intel's $10.9 billion Chips Act grant into a 10% equity stake.
  • The move, a significant shift in industrial policy, aims to secure greater government influence and accountability over the strategic investment.
  • A finalized deal would mark a rare instance of direct government ownership in a major corporation, accelerating Intel's domestic manufacturing build-out.

Efforts to structure a landmark deal that would give the U.S. government a stake in Intel Corp. are ongoing, according to people familiar with the matter. The White House and the Commerce Department are negotiating terms that would see a segment of the $10.9 billion in federal grants awarded to the chipmaker under the Chips and Science Act converted into equity.

The proposed 10% stake represents a strategic pivot from pure subsidy to a model where the government seeks a direct financial interest and a say in the company's direction. This is seen as a way to ensure taxpayer funds are used effectively to bolster domestic semiconductor production for both economic and national security purposes. The precise valuation mechanism for the stake and the long-term nature of the government's role as a shareholder remain key points of discussion, the people said.

Intel, which has recently been surpassed by rivals TSMC and Samsung, is in the midst of a costly turnaround. The capital is crucial for building out its advanced manufacturing facilities in the U.S. The potential for government ownership, while rare, echoes crisis-era interventions like the 2008 auto industry bailouts rather than standard industrial policy.

A spokesperson for the Commerce Department declined to comment on the specifics of the negotiations but reiterated the department's commitment to implementing the Chips Act "in a manner that protects taxpayer interests and strengthens our national security supply chains." Intel did not immediately respond to a request for comment.

The talks are occurring alongside a separate $2 billion equity investment from SoftBank, signaling a wave of confidence—both public and private—in Intel's recovery plan. However, the government's potential entry as a major shareholder has sparked debate. Proponents argue it is a necessary step to counter massive subsidies offered to chipmakers in Asia and Europe, while critics warn of market distortion and government overreach into corporate strategy.

Final approval from the White House is still required, and any deal is contingent on Intel meeting specific milestones tied to its grant funding.