Financial Union, August 23 (Editor Niu Zhanlin)On Friday local time, U.S. Commerce Secretary Lutnik announced that the federal government has acquired a 10% stake in troubled chip giant IntelTrump isThe government has taken the latest step in strengthening control over U.S. companies.

Intel said in a press release that the U.S. government purchased 4,333 billion ordinary shares at a price of $20.47 per share, with a total investment of approximately $9.9 billion, corresponding to 10% of the share.

Screenshot of Intel press release

It is reported that in terms of funding sources, it is reported that 5.70 billion dollars came from grants approved by the Chips and Science Act but not yet disbursed, and another 3.20 billion dollars came from an independent government project to develop secure chips.

U.S. President Trump posted on the social platform Truth Social: "The U.S. government acquired these shares at no cost, and the current market value is about $11 billion. This is a great deal for the United States, and it is the same for Intel."

In addition, the U.S. government has also obtained a license that allows the government to purchase an additional 5% of Intel shares if Intel is no longer a holding shareholder in its Xerox business in the future.

CEO of Intel.Chen Liwu"As the only semiconductor company in the world to simultaneously develop and manufacture cutting-edge logic chips in the United States, Intel has always been committed to ensuring that the world's most advanced technology is made in the United States," he said at a press conference.

Earlier that day, Trump told reporters at the White House that the government should get about 10% of Intel's shares."They have agreed, and I think it's a very cost-effective deal for them."

The White House said Trump would meet with Chen Liwu on Friday afternoon; Lutnik also posted a photo with Chen Liwu on social media.

This marks a significant shift in U.S. industrial policy, and the government begins to play a more active role in the private sector. Lutnik bluntly said this week: "We deserve equity for funding. We will honor the subsidies that the Biden administration has promised, but in return for equity."

SoftBank also announced this week that it would inject $2 billion into Intel, accounting for about 2% of its shares, becoming another heavyweight investor.

Compared to Taipei, Intel¡¯s technology is widely believed to have a gap. Taipei is an important chip supplier for Apple, NVIDIA, Qualcomm, AMD and even Intel itself.

In order to catch up with the gap, Intel is spending tens of billions of dollars to build a chip factory in Ohio and plans to mass-produce the most advanced AI chips from 2026. But in an internal memo in July, Chen Liwu stressed that he would no longer "burn unlimited money" and announced that it would slow down the construction of the Ohio factory according to market conditions, and postpone the start of production until 2030.

Further reading

White House confirms request for Intel to transfer 10% stake: US media: intervention breaks the line

Recent rumours that the US government planned to buy a stake in Intel have finally been confirmed. US Commerce Secretary Lutnik said on the 19th that Intel must cede its stake to the US government in exchange for funding support from the Chip and Science Act. The White House confirmed on the same day that the deal will allow the US government to hold a 10% stake in Intel, and the US Department of Commerce is "finalizing" the relevant details.

Western media generally believes that if the deal is reached, the U.S. government will become the largest shareholder of Intel. This case could also be a model for the other investment projects of the Trump administration, opening a new era of U.S. government influence on big companies. However, according to some media represented by the New York Times, while the Trump administration considering a large-scale investment in this troubled chip giant is understandable, this move could have a major impact on the tech industry, the AI competition and the relationship between the federal government and private enterprises.

On the 19th, White House Press Secretary Levitt said that the U.S. Department of Commerce is promoting the U.S. government's acquisition of a 10% stake in Intel Corporation (Source: White House website)

¡°If we want to give you that money, we¡¯ll take part in it.¡±

In a CNBC show, Lutnik criticized the Chip and Science Act signed by former U.S. President Biden as ¡°simply a free sending of money to Intel,¡± and said the current government¡¯s stance was ¡°If we want to give you that money, take part in it,¡± adding that the U.S. government did not want to control the company, and that no potential arrangement would give the government voting or governance in Intel.

Lutnik receives an interview with CNBC (source: video)

White House Press Secretary Levitt confirmed on the same day that the U.S. Department of Commerce is promoting the transaction of 10% equity held by the government, and Secretary Lutnick is finalizing the relevant details. "The president hopes to put the needs of the United States first from the perspectives of national security and economy".

Intel did not comment on the plan. But last week a company spokesman said it "strongly supports President Trump's efforts to strengthen U.S. leadership in technology and manufacturing."

Bloomberg quoted sources as saying on the 18th that the federal government is considering converting some or all of Intel's funding from the Chip and Science Act into equity. The company originally planned to raise a total of $10.9 billion through such grants, roughly the same amount as it would need to hold a 10 percent stake.

The British Broadcasting Corporation (BBC) believes that exchanging existing government grants for shares is "extremely unusual" and may help Intel compete with rivals such as Nvidia, Samsung and TSMC, especially in the booming artificial intelligence chip market. Vincent Fernando, founder of Singapore-based investment consultancy "01", said that given Intel's key role in U.S. semiconductor production, it is reasonable for the government to take a stake in Intel. Washington needs to wean key industries, such as chip manufacturing and defense equipment, from reliance on suppliers outside the country. However, he also said that while the move could give Intel a boost, it could also "create uncertainty for any company that has participated in or is considering participating in the federal grant program."

U.S. Finance Minister: We will not hire business for Intel

On the day before the White House confirmed that it was considering buying shares in Intel, Intel and SoftBank announced that SoftBank would invest $2 billion in Intel. The U.S. Wall Street Journal quoted data from Global Market Intelligence Corporation as saying that the investment would make the Japanese company own about 2 percent of Intel, making it the sixth largest shareholder in Intel.

However, the New York Times notes that money alone cannot solve Intel's problems. The company needs customers and innovative new products. In the field of personal computer chips, it lags far behind Superview semiconductors (AMD) and Qualcomm, and in the field of artificial intelligence processors lags behind NVIDIA, and its manufacturing department is far less than Taiwan.

CNBC said Intel has struggled to seize the opportunity brought by the artificial intelligence boom in advanced semiconductors, and has invested heavily in manufacturing expansion, but has not yet won important customers. Intel said last fall that it had finalized nearly $8 billion from the Chip and Science Act to build a new factory in Ohio. But in July, Intel CEO Chen Liwu said it would slow down the construction of the new factory based on market conditions.

Intel lost $2.9 billion in the second quarter of this year (source: Net)

"Even if TSMC offers better products, will Apple and Nvidia be forced to choose Intel to maintain the favor of the US government? To what extent will the US government seek to intervene in industrial policy?" The New York Times asked continuously on the 19th. According to US media reports such as the Axios news website, US Treasury Secretary Bescent was interviewed by CNBC on the 19th. When asked whether taking a stake in Intel means persuading US companies to buy chips from the technology giant, he said, "The last thing we will do is to try to attract business for it after taking a stake." Any investment in Intel is aimed at "helping the company stabilize chip production in the United States."

"The U.S. government's actions in strategic areas are becoming more radical."

According to CNBC reports, Lutnik also suggested on 19th that the Trump administration may seek similar deals with other companies funded by the Chip and Science Law. Reuters that informed sources revealed that the U.S. Secretary of Commerce is studying how to exchange shares of companies such as Microsystems, Tianjin Electric and Samsung through allocations.

However, Bloomberg said that although TSMC and Samsung are expanding their business in the United States with the support of the Chip and Science Act, allowing American companies like Intel to produce cutting-edge chips locally has always been a common priority for the Trump and Biden administrations. Earlier this year, Trump's team had preliminary conversations with TSMC to explore the possibility of TSMC operating the Intel plant, but TSMC has withdrawn from the arrangement. U.S. government officials also internally raised the possibility of seeking UAE investment in Intel.

"The U.S. government is becoming more aggressive in strategic areas." Bloomberg said that the Trump administration has reached agreements with Nvidia and AMD to allow the latter to export artificial intelligence chips to China, on the condition that the government will take 15% of its sales to China. In July, the U.S. Department of Defense announced that it would invest US $400 million in Mountain Pass Materials, an American rare earth producer, thus becoming the company's largest shareholder. In June, the U.S. government received so-called "gold shares" in approving the sale of U.S. Steel to Nippon Steel. According to Reuters, this is to prevent the two companies from reducing or delaying promised investments, moving production or jobs outside the United States, or closing or idling factories before a specific time without the president's consent.

According to CNN, Trump¡¯s commitment to revitalizing U.S. manufacturing and consolidating U.S. leadership in technology has so far been the political cornerstone of his second term as president, but the Wall Street Journal says the U.S. government¡¯s intervention in the chip industry has broken the boundaries.