The US government acquired a 9.9% stake in Intel for $8.9 billion last week — converting unpaid government grants into an equity share. President Donald Trump has repeatedly noted that America “paid nothing for these shares” and dubbed it “a great deal” for both the company and the nation. He also broached the possibility of additional deals in the coming months and voiced willingness to ‘help’ such companies.
More deals to come?
“I PAID ZERO FOR INTEL, IT IS WORTH APPROXIMATELY 11 BILLION DOLLARS. All goes to the USA. Why are “stupid” people unhappy with that? I will make deals like that for our Country all day long. I will also help those companies that make such lucrative deals with the United States States. I love seeing their stock price go up, making the USA RICHER, AND RICHER. More jobs for America!!! Who would not want to make deals like that?” Trump wrote on Truth Social.
Top aides including White House economic adviser Kevin Hassett have also hinted at plans for the government to take stakes in other chip companies. He did not share details but suggested that future deal could be within semiconductor companies or even move to other industries.
“I think this is a very, very special circumstance because of the massive amount of CHIPS Act spending that was coming Intel’s way. But the president has made it clear all the way back to the campaign that he thinks that, in the end, it would be great if the U.S. could start to build up a sovereign wealth fund. And so I’m sure that at some point there’ll be more transactions, if not in this industry in other industries” the National Economic Council director told CNBC on Monday.
What exactly is the Intel deal?
The US has announced plans to purchase a 9.9% stake in Intel for $8.9 billion — amounting to $20.47 per share. This represents a discount of about $4 from the closing share price of $24.80 recorded by the company on Friday. The purchase of 433.3 million Intel shares will be made with funding from the $5.7 billion in unpaid grants from the Biden-era CHIPS Act. Another $3.2 billion awarded to Intel for the Secure Enclave program under Trump’s predecessor will round out the transaction.
Intel warns of ‘adverse reactions’
Meanwhile Intel warned through a regulatory filing on Monday afternoon that the deal could spark “adverse reactions” from investors, employees and others.
“There could be adverse reactions, immediately or over time, from investors, employees, customers, suppliers, other business or commercial partners, foreign governments or competitors. There may also be litigation related to the transaction or otherwise and increased public or political scrutiny with respect to the Company,” the company reportedly wrote in the filing.
(With inputs from agencies)