Under the agreement, the White House will acquire a 9.9% stake in Intel for 8.9 billion USD, equivalent to 20.4 USD per share. This price is 4 USD lower than Intel's closing price on 22/8.
To purchase 433.3 million shares, the White House will use 5.7 billion USD from the CHIPS Act and 3.2 billion USD allocated to Intel under the Secure Enclave program. Both programs were initiated under former President Joe Biden.
This agreement eases tensions between Trump and Intel CEO Lip-Bu Tan after the president recently called for Tan's resignation over alleged conflicts of interest. It also provides Intel with additional capital to construct or expand US-based factories.
Intel's stock rose an additional 1% in after-hours trading, following a 5.5% increase during regular trading hours.
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Outside Intel headquarters in California. Photo: Intel |
Outside Intel headquarters in California. Photo: Intel
On 22/8, White House officials stated that Trump also met with Tan. The two previously met on 11/8, after Trump demanded Tan's resignation due to his connections with Chinese businesses. "He wanted to keep his job and ended up giving the US 10 billion USD. So, we are getting 10 billion USD," Trump stated on 22/8.
US Commerce Secretary Howard Lutnick also posted on X that Tan had agreed to a deal that is "fair to both Intel and the American people".
Tan assumed his role earlier this year after the chipmaker failed to capture significant market share in the AI chip sector. Intel has invested heavily in developing its foundry business—manufacturing chips for other companies. However, it has yet to secure major clients. This is a crucial step for scaling operations and building trust with potential customers.
In July, Tan announced that Intel had canceled production plans in Germany and Poland. They also slowed construction in Ohio, and the company's spending is under strict scrutiny. Last month, Intel revealed that its plan to lay off 15% of its workforce is nearly complete.
The events of 22/8 mark the latest unusual intervention by the US government in domestic businesses under President Trump. Earlier this month, the government announced it would receive 15% of Nvidia and AMD's revenue from the sale of certain chips to China.
The Pentagon acquired a 400 million USD stake in rare earth mining company MP Materials. The government also holds a "golden share" in US Steel, as stipulated in the agreement to sell the steelmaker to Nippon Steel (Japan).
Ha Thu (according to Reuters)
