US Government Buys 10% Stake in Intel

President Donald Trump recently announced plans for the US government to buy a 9.9% stake in Intel, to strengthen the US semiconductor industry. The $8.9 billion deal will be partly paid by government grants, according to the company’s August 22 release.

“As the only semiconductor company that does leading-edge logic R&D and manufacturing in the U.S., Intel is deeply committed to ensuring the world’s most advanced technologies are American-made,” said Lip-Bu Tan, CEO of Intel.

According to the government’s economic advisor, Kevin Hassett, the purpose of this deal is to encourage companies to move production to the US, as well as to strengthen the US’s position in the semiconductor manufacturing sector.

Intel said the US government will only have “passive ownership,” which means it will have no special rights regarding the company’s management nor access to exclusive information.

“It is my Great Honor to report that the United States of America now fully owns and controls 10% of INTEL, a Great American Company that has an even more incredible future,” wrote Trump on his personal social media platform, Truth Social. In August last year, Truth Social went public after a $4.6 billion valuation.

“I negotiated this Deal with Lip-Bu Tan, the Highly Respected Chief Executive Officer of the Company. The United States paid nothing for these Shares, and the Shares are now valued at approximately $11 billion. This is a great Deal for America and, also, a great Deal for INTEL,” he continued.

This announcement comes less than a month after Trump publicly called for the immediate resignation of Tan over alleged connections to the Chinese government.

The Trump administration has already announced plans for future deals of this kind as part of a plan to establish a sovereign wealth fund. Though the acquisition of part of an American company by the US government isn’t unheard of, it’s pretty unusual.

The move has some critics worried, arguing it introduces new corporate risks.