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U.S. investment in Intel intends to support the company's stability, according to Bessent's statement

Investment in Intel by the U.S. Treasury, as stated by Secretary Scott Bessent, will be focused on strengthening the struggling semiconductor company.

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U.S. investment in Intel aims at fostering stability, according to Bessent's statements
U.S. investment in Intel aims at fostering stability, according to Bessent's statements

U.S. investment in Intel intends to support the company's stability, according to Bessent's statement

The U.S. government has made an $8.9 billion investment in Intel, acquiring a 9.9% passive equity stake in the company to support its expansion and strengthen the domestic semiconductor industry. This investment is funded by $5.7 billion in remaining CHIPS and Science Act grants and $3.2 billion from the Secure Enclave program, adding to $2.2 billion in earlier CHIPS grants, totaling $11.1 billion of government funding in Intel to date.

Key details of the agreement include:

  • The government will purchase 433.3 million shares at $20.47 per share.
  • The stake is passive, with no board seats, governance, or special information rights; the government will vote alongside other Intel shareholders on shareholder matters.
  • A five-year warrant allows the government to buy up to an additional 5% of Intel shares at $20 each if Intel’s ownership of its foundry business falls below 51%.
  • Previous profit-sharing and claw-back provisions tied to CHIPS grants will be removed to ensure permanency of capital.

This funding aims to help Intel accelerate its more than $100 billion expansion of semiconductor R&D and manufacturing in the U.S., advancing American technology leadership and national security priorities. Intel CEO Lip-Bu Tan emphasized Intel’s commitment to American-made advanced technologies and the historic nature of this investment to support resilient semiconductor supply chains and Trusted Secure Enclave obligations for U.S. defense.

The government's investment is meant to stabilize and boost Intel by providing critical capital to expand domestic chip manufacturing and advanced semiconductor research, reinforcing U.S. supply chain resilience and technological competitiveness in this strategic sector.

In other news, Intel has been struggling financially, recording an annual loss of $18.8 billion in 2024, its first such loss since 1986. The investment will not include SoftBank seeking a board seat or committing to buying Intel’s chips.

Meanwhile, Taiwan's Foxconn plans to manufacture data center equipment with SoftBank at Foxconn's former electric vehicle factory in Ohio as part of the Stargate project. Following the announcement, SoftBank shares dropped more than 5%, while Intel surged 5.6% in after-market hours trading.

The U.S. government's investment in Intel marks a significant step towards strengthening the domestic semiconductor industry and ensuring American technological leadership in the face of growing global competition.

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