Trump says Intel CEO agreed to hand the U.S. a 10% stake in chipmaking company

President Donald Trump said on Friday that Intel's chief executive had agreed to give the U.S. government a 10% stake in the ailing chipmaker, in what would amount to an enormous federal intervention in a private-sector company outside a financial crisis or economic downturn.

The president described the arrangement on Friday afternoon to reporters in the Oval Office. “I said, ‘I think it would be good having the United States as your partner.’ He agreed, and they’ve agreed to do it,” Trump said. “And I think it’s a great deal for them.”

Trump had previously pushed for Intel CEO Lip-Bu Tan to resign over his past connections to the Chinese government. However, now the Trump administration is full-throated in support of the deal.

"This historic agreement strengthens U.S. leadership in semiconductors, which will both grow our economy and help secure America’s technological edge," said Commerce Secretary Howard Lutnick in a social media post, adding the U.S. now "owns" 10% of Intel.

On Friday afternoon, Intel said it was aiming to strengthen its ability to produce semiconductors domestically.

“As the only semiconductor company that does leading-edge logic R&D and manufacturing in the U.S., Intel is deeply committed to ensuring the world’s most advanced technologies are American made,” Tan said in a company statement. "We are grateful for the confidence the President and the Administration have placed in Intel, and we look forward to working to advance U.S. technology and manufacturing leadership.”

The U.S. government is poised to make an $8.9 billion investment through Intel common stock, per the company statement. That sum will be financed through a pair of federal grants under the Chips and Science Act and the Secure Enclave program. Those have been awarded but haven't been formally paid to the company yet. Intel has already received $2.2 billion under the Chips law.

The deal, as laid out, is very unusual given the U.S.'s traditional emphasis on free markets with the state taking a backseat in the U.S. economy. It was not immediately clear how the U.S. would convert federal grants that Intel had accepted under the Chips and Science Act into shareholder equity, a move that could raise legal obstacles. Trump

However, Trump has been aggressive about extending government control into the private sector as he sees fit.

"It's highly unprecedented. The only time the United States government has taken an active shareholding stake in a private company is either during war or during a absolute economic calamity like the Great Recession or in Great Depression," Scott Lincicome, a vice president of general economics at the libertarian-leaning Cato Institute said. "Neither of those things apply right now."

The move had one prominent cheerleader among progressives. Sen. Bernie Sanders of Vermont has long pushed for the U.S. government to become a shareholder in companies that accepted federal money under the Chips and Science Act, a bipartisan law signed by former President Biden.

“I am glad the Trump administration is in agreement with the amendment I offered three years ago to the CHIPS Act,” Sanders said in a statement.