US government snaps up 10% of Intel for $8.9B

Congratulations America, your government now owns 10 percent of troubled domestic chipmaker Intel. Intel and the government announced the deal late on Friday. Under it, Intel will get $5.7 billion in grants that officials had allocated but not yet paid under former President Biden's CHIPS and Science Act. The government gave …

[Michael Hoffmann]

You got rid of the engineer who was trying for a slow recovery and replaced him with another guy who was going to flog the place for short-term gain, one step removed from private equity raiders.

Not sure what the US bail out is going to achieve: probably take the cash and use it for stock buybacks, to bump the stock price long enough to leverage the golden parachutes?

[pimppetgaeghsr]

Wasn't he doing prayer meetings to try and turn it around?

[vtcodger]

The market is always rightt

I'm not sure what this "bail out" is supposed to accomplish either. From where I'm sitting, it looks like extortion and/or a permanent 10% tax on Intel shareholders future earnings. Clearly I'm wrong as the stock went up on the news. And the stock market is always right ... except in 1929, 2000, and 2008 of course. But I'd sure like someone to explain to me in simple terms why this deal benefits Intel rather than adding a few more problems to the company's already impressive problem list.

[Yet Another Anonymous coward]

Re: The market is always rightt

> explain to me in simple terms why this deal benefits Intel

The new major shareholder has an infinite budget and makes up the law.

Every Federal/DoD computer user now has to buy Intel, anybody receiving Federal grants has to buy Intel, any foreign government who doesn't want tariffs/a visit from the 101st airborne, better buy Intel

[Anonymous Coward]

Re: The market is always rightt

Protection money simple as. Tony Soprano ways of doing business.

TBH I don’t think Lip-Bu Tan has the authority to do this deal, the board need to vote on the proposal and unless Intel had already bought the shares back to offer this is a significant shares dilution. I assume the SEC have a sycophant running it now.

Any CEO who ‘gave away’ $5.7bn in assets unnecessarily is breaching their fiduciary duty and is clearly setting up a class action against them/Intel.

Of yeah … and CHIPs money was a (conditional) *grant* as in gave, not sold. Free money, tied to building fabs in USA.

[Roland6]

Re: The market is always rightt

> From where I'm sitting, it looks like extortion and/or a permanent 10% tax on Intel shareholders future earnings.

Clearly sitting in a strange place. Government has made (assuming Trump doesn’t Chang in his mind) an $8.9Bn investment, for which they are entitled to repayments on, just like any other investor. If the existing investors don’t like the terms, they have the freedom to increase their collective investment to match the government…

[Anonymous Coward]

Re: The market is always rightt

@Roland6

"Clearly sitting in a strange place. Government has made (assuming Trump doesn’t Chang in his mind) an $8.9Bn investment"

I am going to guess the 'extortion' claim is due to trying to threaten the job of Tan and the tariff stuff. I dont know if it was, I know Biden and Trump are pretty desperate to onshore fabs as a national security thing.

[Roland6]

Re: The market is always rightt

Agree the way Trump "negotiated" this was most probably extortion: give me x if you don't want to loose the $8.9Bn of government funding.

The taking of a shareholding in exchange for government investment isn't new, even in the USA. The US government took partial ownership of General Motors, Citigroup and AIG in 2009 - to prevent collapse. Although, taking an ownership slice on grounds of national security is. what is going to be a little more problematic (ie. require more creativity) is finding ways to take 10% of say Microsoft on grounds of national security.

The idea of government being a substantial shareholder has been around since whenever, and so enabling the government to also get dividends whenever the company pays out to its investors, even when those dividends have been funded by loans (to avoid tax).

The bit I don't get is how this could be construed as "a permanent 10% tax on Intel shareholders future earnings. ". As far as I can see all other options: loan, additional investment from existing shareholders, etc. all would result in a lower earns per share. So unless you believe that companies should be able to get taxpayer funded welfare with no strings attached, which is wholly contrary to other work related welfare and benefits, the existing shareholders are gong to be taking a hit regardless.

[Anonymous Coward]

Re: The market is always rightt

@Roland6

The bit I don't get is how this could be construed as "a permanent 10% tax on Intel shareholders future earnings. "

Yeah that reads like BS. The gov is just acting as any other investor and gets their share.

[Someone Else]

Re: The market is always rightt

But I'd sure like someone to explain to me in simple terms why this deal benefits Intel rather than adding a few more problems to the company's already impressive problem list.

I'd like somebody to explain to me in simple terms how this is even legal¹. I don't see anywhere in the U.S. Constitution where it allows any branch of government to take an equity state in a private business. Is this a step in nationalizing Intel?

_{¹Not that that should bother anyone in this "government" given tRump's arms-length relationship with legality. But still...}

[martinusher]

Re: The market is always rightt

It would be easier to explain if there was something like the Canadian concept of a Crown Corporation -- a company that's owned and controlled by the government who's business is in the public interest that still acts like a private company.

[Roland6]

Re: The market is always rightt

> I don't see anywhere in the U.S. Constitution where it allows any branch of government to take an equity state in a private business.

But do you see anywhere in the U.S. Constitution that bars any branch of government from taking an equity state in a business...

Remember this is a big difference between US/UK law and European law.

[Anonymous Coward]

What it will achieve is Intel getting into trouble worldwide for unfair competition due to government sponsorship.

Way to go, morons.

[Anonymous Coward]

So like the USA's 300% tarrif on Bombardiers because the Quebec pension fund invested in them ?

[spuck]

Or how we (the US) like to cry foul on solar panels built in China because they are "unfairly" subsidized by their government.

[Anonymous Coward]

The most socialist government the USA has had in ages...

Tax on imports. Telling companies where to build factories. Different policies on competing countries. Telling people what they can and cannot buy. Government owning stakes in private companies. Rapidly changing strategies for random policies. Political opponents in jail.

It's like the USSR...

[idoak]

Re: The most socialist government the USA has had in ages...

And very nationalistic too. Almost, one might say, nationalist-socialist...

[vtcodger]

Re: The most socialist government the USA has had in ages...

More like Mao's Great Leap Forward I should think.

[Anonymous Coward]

Re: The most socialist government the USA has had in ages...

Like the Farage Flop then.

[Anonymous Coward]

Re: The most socialist government the USA has had in ages...

National Neo-Con Crypto/Christian/Socialist Banana (standardised) Petro-State Republic of Gilead.

.. get ‘em all in.

[EricM]

Re: The most socialist government the USA has had in ages...

I agree. On the other hand the USSR at least tied this behavior to their own laws.

What's currently happening in the U.S. IMHO even compares better to how small monarchies have been run in the past, where such decisions also have been made arbitrarily and on the fly to fit the momentary interests and priorities of the person in power, usually regardless of the mental state of the person in power.

Modern-day Russia is another good example of this kind of "government".

[abend0c4]

Re: The most socialist government the USA has had in ages...

Government owning stakes in private companies

Guess who is the largest individual shareholder in TSMC.

[Anonymous Coward]

Re: The most socialist government the USA has had in ages...

Many companies even in democratic countries are owned or partially owned by the state (often to keep them alive when their private owner went bankrupt) . But actually those are the same countries Trumpo likes to call "communist". And MAGA is also about the smallest possibile state, isn't it? So taking a stake in a private company and telling them how they shoulid work is a complete U-turn, isn't it?

[Pascal Monett]

Re: a complete U-turn

That is Trump's specialty.

[Someone Else]

Re: The most socialist government the USA has had in ages...

Since when has consistency, ethics, and avoiding hypocrisy been something the DickTater-in-Chief has ever aspired to (or attained, even by accident)?

[VoiceOfTruth]

Re: The most socialist government the USA has had in ages...

It's nothing like the USSR. It is the USA with the baubles and decorations removed.

This is the ugly America which has always lurked beneath the surface.

[Wang Cores]

Re: The most socialist government the USA has had in ages...

The socialist model except the public gets no benefits seems to be the model for the US.

[CountCadaver]

Re: The most socialist government the USA has had in ages...

Privatise the profits socialise the losses

[Ropewash]

Re: The most socialist government the USA has had in ages...

I propose 'The Socialite Model' given that the entire political theatre has devolved into actual theatre.

[Muradra]

Re: The most socialist government the USA has had in ages...

Exactly! I'm not an American but when I saw this I was like this is bye bye capatilism! And then. I saw this comment and I was like yep, bye bye capatilism!

[Neil Barnes]

the Highly Respected Chief Executive Officer of the Company

I'm concerned. What's going to happen when Trump Uses Up All the Capital Letters?

[Empire of the Pussycat]

Re: the Highly Respected Chief Executive Officer of the Company

He'll release new TrumpLetter$$$, $1,000 each, the MAGAs will snap them up, bigly.

[Anonymous Coward]

Re: the Highly Respected Chief Executive Officer of the Company

Are NFT’s still a thing ??

[Pascal Monett]

Re: the Highly Respected Chief Executive Officer of the Company

Yeah, the guy he was calling on to step down just a week ago.

Trump. Government by weathervane. Except the wind is wherever his ego gets the biggest boost from.

[Someone Else]

Re: the Highly Respected Chief Executive Officer of the Company

Except the wind is wherever his ego gets the biggest boost from whoever is blowing smoke up his ass/arse at the moment.

There, FTFY

[sarusa]

Seize the Means of Production!

I can just see what the demands are going to be like from the Angry Toddler administration. 'It says here that your chipset has a 'wake' function. We can't have any of this woke garbage in the Angry Toddler's chips, take it out now!1'

... ... 'And wait... Transcoding!?!?@#one!'

[m4r35n357]

Re: Seize the Means of Production!

Abort!

[Bertramus]

Re: Seize the Means of Production!

Oh no, we can't have that either

[Anonymous Coward]

Re: Seize the Means of Production!

@sarusa

'It says here that your chipset has a 'wake' function. We can't have any of this woke garbage in the Angry Toddler's chips, take it out now!1'

... ... 'And wait... Transcoding!?!?@#one!'

And it sounds really stupid doesnt it? That is what we would hope is an exaggeration and yet fear it could happen? Can you imagine the idiocy of people stomping over things to police language?

Just like this- https://www.theregister.com/2025/08/12/inclusive_language_guide_gets_an/

[Anonymous Coward]

Once Upon A Time In The West...................

....we came to recognise the WinTel partnership................

....is M$ next?

....I think we should be told!!

[Anonymous Coward]

AMD

AMD have slowly and methodically overtaken Intel for a long while now (since Lisa Su became CEO). Biggest problem for Intel was not being capable of manufacturing past 10 nanometre in-house.

Doesn't bode well for Orange-mans push for all US manufacturing to be in-house.

[Yet Another Anonymous coward]

Re: AMD

Except he can now take-over AMD as well.

[IGotOut]

Reminds me, I need to get some Taco's.

"I negotiated this Deal with Lip-Bu Tan, the Highly Respected Chief Executive Officer of the Company"

The same highly respected CEO you were trying to get fired just a few weeks ago?

And the right said Biden had memory issues.

[Yet Another Anonymous coward]

Re: Reminds me, I need to get some Taco's.

That was before he gave Trump 10% of Intel for free

[Fruit and Nutcase]

I negotiated this Deal with...

God

The Devil

Mickey Mouse

Bella Lugosi

Putin

North Korea

Fidel Castro

Mr Ed

Ed Sullivan

E. T.

The IRS

Henry Ford

Big Bird

Champion the Wonder Horse

Shergar

Jack and Jill

Old MacDonald and his quack quacks

Yes, he's a deal maker extraordinaire

[Anonymous Coward]

So the way to beat a communist country that props up and controls huge swaths of private industry, is for the U.S. to do the same thing?

[VoiceOfTruth]

American car makers and American farmers have been propped up and bailed out for years. Boeing depends on government contracts and preferential treatment.

Don't pretend that the USA is capitalist.

[Anonymous Coward]

You forgot banks and insurances...

That's unregulated, greed capitalism at its best: "my profits are mine, my debts are yours...."

[UnknownUnknown]

Not any more … the bags of Made in America wheat/corn/maize/soya etc …. Have no distribution chemannel since USAid was wood-chipped.

[Fruit and Nutcase]

is for the U.S. to do the same thing?

Not sure which of these fits best in this case - may be a bit of both:

"If you can't beat'em, join'em"

"Imitation is the sincerest form of flattery"

[Tron]

Trump doing what he does best: polishing turds.

There is no 'I' in GAFA for a reason.

Intel will eventually make mil chips for the US mil, and probably not much else.

Still, it is a useful precedent. When the AI scam deflates, there will be a few more tech corporations chasing a US government bail out.

Incidentally, if we can't trust Chinese state-backed businesses, why should we trust American ones, when the USG just waged a taxiff war against us?

[Grogan]

Fuck right off. I'll never buy another piece of Intel hardware again, with the U.S. government (and some of its cronies) having controlling interests in the company. I wouldn't trust them with my snot.

This is despicable kleptocracy on display, akin to what Putin does.

[MrReynolds2U]

Extortion?

The CHIPS money was available to companies like Intel. In fact, it was already allocated (as stated in the article).

But... give us 10% of your company or you don't get the money and you competitors do. I'll also keep trashing you and affect your market price.

[Anonymous Coward]

Re: Extortion?

For ‘free’ too - it was a grant…

…. as long as you remembered to build a factory for some American chippie’s to work in.

[TimMaher]

Re: American chippies.

What? A wooden furniture factory?

[DoContra]

Re: American chippies.

Cod and Freedom FriesChips!

[pimppetgaeghsr]

Not sure how 10% equity stake amounts to ownership for the people crying socialism, then again I don't think they even know what point they are trying to make, and probably would be the ones suggesting the UK goverment did the same with ARM.

[LBJsPNS]

You're likely not sure about a lot of things.

[Justthefacts]

Do *you* think that 10% stake is a passive investment holding, a stake reward for providing working capital?

Do you think *Trump* intends it as a passive investment? Or do you think, just maybe, Trump views it as a controlling interest?

If the management dare to disagree with something he tells them to do, either related to their core business of making profits by selling chips, or *not* related to that, do you think he will

a) Jump around and shout a lot on phone calls to the board, as any activist 10% shareholder is entitled to do

b) Threaten to have the CEO and the board arrested or deported?

Go on, if you really aren’t sure if this is expropriation by a dictator, let’s hear you expand your claim that this is “just a 10% stake” more fully, with reference to “voting rights at the shareholder meeting”

[O'Reg Inalsin]

Does this mean we get the insider's discount

... on the hottest chips in town?

[Rivalroger]

Tom Lehrer again

His song about nuclear proliferation with the line “Whose next” can be adapted here.

My bet is Palantir.

[Kameljoe21]

So the government strong armed a company for Grant said it was already going to give in exchange for 10% of their company. If I was the CEO of Intel I would have been like if you want 10% then you need to give us 10 billion dollars for 10%. Grants are grants for a reason not in exchange for part of a company.

If the government is going to get into the business of buying companies then it needs to purchase them with a closet state they have absolutely zero control in what the company does. Now in this case I would have invested 50 billion dollars into the company. Rather than 10 or less than 10. If you want US ship makers then you need to pay them and pay them well.

[Brl4n]

China

Governments don't excel in any subject but it would be nice if semiconductor supply chain could be more robust. Not an ideal way to go about it but at least it is a different approach.

[Ryan D]

So the largest voting share of Intel

Belongs to the US government. That can only end well /S. remind me again how many bankruptcies the Grifter In Cheese has to his credit?

[martinusher]

Its an age thing

I must be really, really, old because this was quite common practice in the UK up till 1980. The government invested in struggling British companies that were largely viable but were unable to raise capital on the public market, often because there were more lucrative uses for the capital than investing in that company rather than there being something inherently wrong in that investment.

Its actually how much of British core industry -- utilities, coal, steel, railways -- became publicly owned in the first place. It wasn't that there was some fundamental ideological push for public ownership, its just that 'the market' was unable to supply the necessary investment needed to keep the industries running and improve them. The British strategy did suffer from the flaw that the government, being directly involved, brought these industries under the Treasury's accounting and so capital investment was seen as a public expense, which if you know anything how Britain works, means that unless that investment involves defense or something like that its going to be even at its most charitably put 'parsimonious'. However, by the 1970s the Government had figured out that rather than just taking over businesses they'd invest in them, provide capital and so get an equity stake. This actually worked out quite well except for another flaw -- politics. With the change of government in 1979 there was an ideological swing away from public ownership with the result that there was a big sell off (often at below book). The resulting mini-boom made the Treasury a bit flush for quite a bit of the 80s but the long term consequences were severe --- under investment was never fixed and things like the railways got into such a state that the government had to take them over again (less the really good bits like the real estate portfolio, freight operations and so on, of course).

We're going to get stiffed over Intel.....I just feel it in my bones. But Intel shouldn't have got to this state in the first place.

[Anonymous Coward]

Two sides to this coin

On one hand it's understandable that the government and the taxpayers want to profit from the turnaround if it works out. It's inconceivable that the private sector gets all the profit and the taxpayers foot the bill if things go sour. Without taking a stake the government is handing out free money which might just as easily end up in the pockets of the shareholders whilst not doing anything to safeguard the survival of the company.

On the other hand if the company becomes a government-owned entity it becomes liable to political intervention and agendas. Stockholders may not want to own a company where the government runs the show or limits their profits by blocking share buybacks, for example.

In addition other nations may move away from working with Intel if they see the U.S. government is invested in them. Or they may impose stricter rules and regulations to prevent political escapades.