U.S. President Donald Trump met with Intel Chief Executive Chen Liwu at the White House on Friday to finalize a deal that would give the U.S. government a nearly 10% stake in the troubled chipmaker. According to Intel's statement, the U.S. government will receive 433.3 million shares of common stock, representing 9.9% of Intel's fully diluted common stock. The investment, worth $8.9 billion, will be funded by previously approved but not yet disbursed funding from the CHIP and Science Act and the Secure Enclave program.
Intel said that when combined with the $2.2 billion in Chip Law funding it received, the investment totaled $11.1 billion. The underlying shares have no voting rights and the U.S. government will not receive a board seat.
"We thank the President and his administration for their trust in Intel and look forward to working together to advance American leadership in technology and manufacturing," Chen Liwu said in the statement.
Intel shares closed up 5.5% in New York on Friday at $24.80. After the deal was finalized, the stock price fluctuated and fell by about 1% after hours.
Trump said on social media that "this is a good deal for the United States and a good deal for Intel."
"Intel's cutting-edge semiconductor and chip manufacturing is critical to our country's future," he said.
Critics believe thatThe U.S. government's stake marks an unprecedented intervention in a local company. This is a departure from the principles of free-market capitalism long embraced by investors and policymakers, except in extreme circumstances such as war or systemic economic crisis.
A White House official said the administration views this as a special and unique situation and views semiconductor production as a national security issue. Intel is one of the few U.S. companies that can produce chips at scale locally, and the government wants to avoid shortages like those that have plagued the supply chain in recent years, the official said.