QCOM mention; Intel announces $8.9 billion investment from US government, which will own 9.9% of chipmaker
Daniel Howley and Laura Bratton
Updated Fri, August 22, 2025 at 2:08 PM PDT 3 min read
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The US government has taken an $8.9 billion, 9.9% stake in Intel ( INTC), buying 433.3 million shares in the chipmaker at a price of $20.47 per share.
The government’s investment in Intel will be passive ownership, with no Board representation or other governance or information rights, Intel said in a statement. Intel said the government also agreed to vote with the company's Board of Directors.
Intel said 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 US 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 US 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 announcement late Friday comes after President Trump said earlier in the day his administration would take a 10% stake in ailing chip giant Intel. Trump called it a "great deal." Intel's stock closed up 5.5% after the president's announcement.
Intel stock fell 1% in after-hours trading on Friday after details of the deal were confirmed.
NasdaqGS - Nasdaq Real Time Price•USD
Intel Corporation (INTC)
24.80
+1.30
+(5.53%)
At close: 4:00:01 PM EDT
24.67
-0.13
(-0.52%)
After hours: 5:38:48 PM EDT
YTD
"President Trump’s focus on U.S. chip manufacturing is driving historic investments in a vital industry that is integral to the country’s economic and national security," Intel CEO Lip-Bu Tan said in a statement. "We are grateful for the confidence the President and the Administration have placed in Intel, and we look forward to working to advance U.S. technology and manufacturing leadership."
On Tuesday Treasury Secretary Scott Bessent told CNBC that the administration was exploring converting Intel's funding from the Biden-era CHIPS Act into equity aimed at stabilizing the company's US manufacturing business.
Intel is dealing with multiple issues across its businesses. Its manufacturing division is bleeding cash, just as its legacy computer chip segment forfeits market share to rivals Advanced Micro Devices ( AMD) and Qualcomm ( QCOM) in the PC space. Intel is also woefully behind AMD and Nvidia ( NVDA) in the AI race.
The company's market capitalization of $111 billion is less than half of its value in 2021. And CEO Lip-Bu Tan has been forced to lay off 15% of the company's workforce and shelve plans to build plants in Europe.
But the troubled chipmaker is the only large-scale US-based leading-edge chip manufacturer, giving it geopolitical significance as the nation looks to reshore semiconductor production.
Trump's announcement comes the same week that SoftBank Group announced a $2 billion investment in Intel.
All of this comes as Intel continues to navigate its rocky turnaround plan that began under previous CEO Pat Gelsinger. Current CEO Lip-Bu Tan has scaled back Gelsinger's original vision, canceling construction of international plants and further delaying Intel's $20 billion Ohio chip complex.
Intel is fighting to bring customers into its third-party chip foundry business as it works to scale its newest 18A chip technology. The company has already signed agreements to build chips on its technology with Microsoft ( MSFT) and Amazon ( AMZN), but Intel is still the foundry business's largest customer.
As part of the deal, Intel said the government will receive a five-year warrant, at $20 per share for an additional five percent of Intel common shares, exercisable only if Intel ceases to own at least 51% of the foundry business.
The company is also contending with losing market share in the server business and client computing business to rival AMD, which also benefits from its own AI business. Intel has effectively been shut out of the AI race due to a lack of innovation compared to AMD ( AMD) and Nvidia ( NVDA).
Intel CEO Lip-Bu Tan delivers a speech during the Computex 2025 exhibition in Taipei, Taiwan, Monday, May 19, 2025. (AP Photo/Chiang Ying-ying, File) · ASSOCIATED PRESSEmail Daniel Howley at dhowley@yahoofinance.com. Follow him on X/Twitter at @DanielHowley. |
