U.S. Government Acquires 10% Stake in Intel to Retain Control Over Foundry Business

The U.S. government has acquired a 10% equity stake in Intel Corporation, a move designed to prevent the sale or spin-off of the company's struggling foundry business. This strategic investment aims to keep Intel's chip manufacturing capabilities under U.S. control, despite the unit reporting a $13 billion loss last year.

Intel's Chief Financial Officer, David Zinsner, disclosed that the agreement includes a five-year warrant allowing the government to acquire an additional 5% stake if Intel's ownership in its foundry business falls below 51%. Zinsner stated, "I think from the government’s perspective, they were aligned with that; they didn’t want to see us take the business and spin it off or sell it to somebody."

The deal also involved Intel receiving $5.7 billion in cash, part of the CHIPS and Science Act grants previously awarded but not yet disbursed. White House Press Secretary Karoline Leavitt mentioned that the agreement is still being finalized, describing it as a "creative solution" initiated by President Donald Trump and currently under negotiation by the Department of Commerce.

This intervention reflects the administration's commitment to bolstering domestic semiconductor manufacturing amid global supply chain challenges. However, Intel has cautioned shareholders that the government's stake could potentially impact international sales and relationships, given that 76% of its revenue in 2024 was generated outside the U.S.