us government eyes major stake in intel: a new direction for chips act funding?
Washington, Tuesday, 19 August 2025.
the trump administration is considering a radical proposal. it may convert intel’s chips act subsidies into a 10% equity stake. this would make the u.s. government intel’s largest shareholder. the potential deal, valued around $10.5 billion, could reshape intel’s financial structure. it also changes the government’s role in the semiconductor industry. intel’s stock dipped as investors weighed this shift. this news comes as softbank invests $2 billion in intel, signaling confidence in its technology.
market reaction and analysis
Intel’s stock experienced volatility amid these developments [1]. News of potential government equity led to an initial drop of over 3% [4][1]. However, the announcement of SoftBank’s $2 billion investment caused a rebound, with after-hours trading showing gains exceeding 5% [4]. Aptus Capital Advisors portfolio manager David Wagner, holding over 80,000 Intel shares, suggested government intervention might signal deeper competitive issues than previously anticipated [2]. Wagner views the equity stake as a preferable alternative to full nationalization, despite reservations about using taxpayer funds [2].
softbank’s strategic investment
SoftBank Group announced a $2 billion investment in Intel, acquiring shares at $23 each [2][3]. This investment makes SoftBank the fifth-largest shareholder, holding approximately 1.3% of Intel’s shares [3]. SoftBank’s chairman, Masayoshi Son, expressed confidence in the expansion of U.S. semiconductor manufacturing and Intel’s pivotal role [3]. Intel’s CEO, Chen Li-wu, acknowledged Son’s long-term partnership and appreciated the vote of confidence [3]. The investment is viewed as a validation of Intel’s technology roadmap and long-term competitiveness [3].
government influence and potential shifts
The U.S. government’s potential equity stake reflects a move towards greater intervention in strategic sectors [4]. This approach aligns with recent actions, such as demanding a 15% cut from semiconductor sales to China and acquiring a ‘golden share’ in U.S. Steel [4]. The Department of Defense’s prior acquisition of a 15% stake in MP Materials, a rare earth producer, further exemplifies this trend [1][4]. These actions suggest a deliberate strategy to bolster domestic industries critical to national security and economic stability [GPT].
intel’s challenges and restructuring
Intel faces significant challenges, including lagging behind competitors like TSMC and Samsung in chip technology [2][3]. The company’s代工 business is struggling to gain traction [3]. In 2024, Intel’s stock declined by 60% due to slow customer acquisition in its代工 sector, though it has rebounded by 18% in 2025 [3]. New CEO Chen Li-wu is implementing cost-cutting measures and workforce reductions to streamline operations [2]. Intel plans to reduce its core workforce to 75,000 by year-end through layoffs and attrition, a 24.623 or 24.62% reduction from 2024 [5].
chips act implications and uncertainties
The proposed equity conversion raises questions about the Chips Act funding distribution [1]. Intel is slated to receive $10.9 billion in subsidies for commercial and military chip production [1][2]. As of January 2025, Intel had already received $2.2 billion [1]. It remains unclear whether this initial disbursement will be factored into the potential equity stake [1]. The specific timeline for future funding and its conversion to equity are also uncertain [1]. White House officials are considering extending the equity model to other Chips Act recipients, though internal support and company consultations are still pending [1][2].