Chipping Away the Politico-Economic Implications of the US Stake in Intel

Intel’s relationship with the United States (US) government since 2021 has experienced considerable ebbs and flows, though it seems to be on a high lately, obtaining a major investment from the US government as well as a slew of high-profile, major investments from leading high-tech firms like Nvidia.  These public and private investments appear to bolster the financial troubled chip giant, but they also have the potential to create adverse political consequences for the firm and its private investors as this piece explores.

Things seemed on a downward path when in May 2024, former President Joseph Biden’s administration revoked the license that allowed Intel to sell laptop and handset chips to Huawei, potential costing Intel billions.[1]  Six months later, though, there was good news for the company when Biden’s Commerce Secretary announced that Intel would receive a massive $7.86 billion of CHIPS sand Science Act support for the building or modernization of several semiconductor facilities.[2]  In March 2025, the new occupant in the Oval Office, President Donald Trump, seemed to end Intel’s dream of CHIPS Act.  During his 2025 State of the Union address, Trump stated that he planned to push for the cancellation of the CHIPS Act deriding it as a “‘horrible, horrible thing’” and arguing that “‘we don’t have to give them money’” because tariffs were a better tool to drive semiconductor investment in the US.[3]  The next month Intel learned that it needed to obtain a license from the US government to sell certain artificial intelligence chips to China, implying yet more financial pain.[4]

Things went southward for the beleaguered chipmaker in early August when Trump attacked Intel CEO Lip-Bu Tan.  In the wake of US Senator Tom Cotton sending a letter to Intel’s Board pointing out concerns about Tan’s links with Chinese business, Trump lambasted Tan on social media, writing “‘The CEO of Intel is highly CONFLICTED and must resign, immediately.  There is no other solution.’”[5]  In reply to Trump’s post, Intel issued a statement emphasizing it is “‘deeply committed to advancing U.S. national and economic security interests and is making significant investments aligned with the President’s America First agenda.’”  Tan wrote, “there was misinformation circulating about his past roles at Walden International and Cadence Design Systems.” [6]  A meeting between Tan, Trump, and some high-level administration officials apparently cleared the air with Trump subsequently writing, “‘the meeting was a very interesting one.  His success and rise is an amazing story.’”[7]

Less than 10 days subsequent, things were on an upswing for Intel.  The story broke that the Trump administration had decided to buy a 10 percent, non-voting stake in Intel, which would make it the company’s largest shareholder.  It would acquire this stake for $8.9 billion on top of the CHIPS Act money already allocated to Intel.  Trump trumpeted that the investment was a “‘great Deal for America and, also, a great Deal for INTEL.’”[8]  Many questioned the wisdom of the investment given Intel’s troubles, but also because it took place despite any significant economic or political risks.  Observers wondered aloud, too, if Washington’s involvement in the company might lead to the politicization of business decision making at the company even though, per the terms of the deal, the US obtained no voting rights for its stake, favoritism towards or the currying of Intel, or the distortion of markets.[9] 

American companies are joining, at least figuratively, the US in investing in Intel.  On September 18, it was announced that Nvidia would pour $5 billion into Intel to jointly develop data center and PC chips.[10]  More recently, there is talk that Intel is working on securing an investment from Apple to boost its capital, improve its credibility, and perhaps obtain new chip manufacturing opportunities.[11]  American businesses are not the only ones jumping on the “invest in Intel” bandwagon.  Not long after Washington struck its deal with Intel, Japan’s SoftBank Group, which has been exploring buying Intel’s chip foundry business, said it would invest $2 billion into the chipmaker.[12]

The potential political consequences of the US stake and other firm’s investments in Intel have not received due consideration.  This is odd given that some foreign governments have voiced concerns.  To be specific, in late August, official Chinese media raised suspicions about the deal, hinting that Washington’s involvement in Intel would generate worries about backdoors in the firm’s products or it operating at home and abroad pursuant to some special US government regulatory and/or political criteria.[13]  In a US Securities and Exchange Commission filing, Intel acknowledged, foreign governments might react adversely to Washington’s position in the company.[14]  As for private firm investments in Intel, many new story interviewees have questioned if the investments are politically motivated.[15]  Some have even speculated Apple and Softbank invested in Intel to secure their relations with Trump.[16]  It is easy to imagine these investment agglomerations, with the odor of politics swirling about, engendering even more suspicions about Intel as well as the investing firms themselves and the criteria that is guiding US government interactions with them as well as their interactions with Washington, Intel, and other firms.  This tracks with Intel’s admission that the US stake might not just worry foreign governments, but also customers, suppliers, and other business or commercial partners.[17]  All of these politico-economic risks need to be factored into account when calculating the US government’s and private firms’ eventual rates of investment return from the stakes they have taken in Intel.

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[1] Bill McColl, “Intel Revises Revenue Guidance after US Slaps New Restrictions on Chip Sales to China,” Investopedia, May 8, 2024, https://www.investopedia.com/intel-revises-revenue-guidance-after-us-slaps-new-restrictions-on-chip-sales-to-china-8645214.

[2] Julia Shapero, “Biden Administration Finalized Nearly $8B in CHIPS Funding for Intel,” The Hill, November 26, 2024, https://thehill.com/policy/technology/5010345-biden-administration-finalizes-nearly-8b-in-chips-funding-for-intel.

[3] Ken Moriyasu and Yifan Yu, “Trump Calls for Scrapping of Biden’s $52bn Signature CHIPS Act,” Nikkei Asia, March 5, 2025, https://asia.nikkei.com/Spotlight/Trump-administration/Trump-calls-for-scrapping-of-Biden-s-52bn-signature-CHIPS-Act; and Kim Eun-jin, “Trump’s Push to Abolish CHIPs Act Sparks Debate over U.S. Semiconductor Strategy,” BusinessKorea, March 5, 2025, https://www.businesskorea.co.kr/news/articleView.html?idxno=236730.

[4] Juby Babu, “Intel Will Need License to Export AI Chips to Chinese Clients, FT Reports,” Reuters, April 16, 2025, https://www.reuters.com/technology/intel-will-need-license-export-ai-chips-chinese-clients-ft-reports-2025-04-16.

[5] Pak Yiu, “Trump Calls for Intel CEO to Step Down, Implying China Ties,” Nikkei Asia, August 7, 2025, https://asia.nikkei.com/business/technology/trump-calls-for-intel-ceo-to-step-down-implying-china-ties; and “Intel CEO Responds after Trump Calls for his Resignation,” Nikkei Asia, August 8, 2025, https://asia.nikkei.com/business/technology/intel-ceo-responds-after-trump-calls-for-his-resignation.  On Tan’s China investment portfolio and issues associated with it, see Eduardo Baptista, Stephen Nellis, and Max A. Cherney, “Intel CEO Invested in Hundreds of Chinese Companies, Some with Military Ties,” Reuters, April 10, 2025, https://www.reuters.com/technology/intel-ceo-invested-hundreds-chinese-companies-some-with-military-ties-2025-04-10.

[6] “Intel CEO Responds after Trump Calls for his Resignation.”

[7] Brett Samuels, “Trump Meets with Intel CEO after Calling for his Resignation,” The Hill, August 11, 2025, https://thehill.com/policy/technology/5447077-trump-intel-ceo-meeting.

[8] “U.S. Takes Nearly 10% Intel Stake, Clinching Unorthodox Deal,” Japan Times, August 23, 2025, https://www.japantimes.co.jp/business/2025/08/23/us-intel-stake/

[9] Hannah Grabenstein, “What You Need to Know about The Government’s 10% Stake in Intel,” PBS, September 20, 2025, https://www.pbs.org/newshour/politics/what-economic-and-policy-experts-think-about-the-u-s-governments-stake-in-intel; Sara Dorn, “Trump Attacks Critics of Intel Deal and Promises More Private Industry ‘Deals,’” Forbes, August 25, 2025, https://www.forbes.com/sites/forbesbooksauthors/2025/09/24/taking-the-leap-from-solopreneur-to-entrepreneur; and Chris Iorfida, “The U.S. Government Has Taken a Stake in Intel,” CBC, August 27, 2025, https://www.cbc.ca/news/business/us-lutnick-defence-industry-intel-1.7617783.

[10] John Melloy and Chris Eudaily, “Intel Surges 22% after $5 Billion Nvidia Investment, Posts Best Day in Nearly 38 Years,” CNBC, September 18, 2025, https://www.cnbc.com/2025/09/18/intel-nvidia-investment.html.  For an assessment of the deal’s merits, see Wayne Williams, “‘NV Link is the Key,’” Techradar.pro, September 22, 2025, https://www.techradar.com/pro/nvlink-is-the-key-analysts-ponder-on-probably-the-biggest-tech-deal-of-the-decade-intel-nvidia-and-what-it-means-for-tsmc-amd-and-others.

[11] Deborah Sophia, “Intel Seeks Investment from Apple, Bloomberg News Reports,” Reuters, September 25, 2025, https://www.reuters.com/business/intel-seeks-investment-apple-bloomberg-news-reports-2025-09-24.

[12] Jaspreet Singh, Max A. Cherney, and Anton Bridge, “Intel Gets $2 Billion Lifeline in the Form of Softbank Equity Investment,” Reuters, August 19, 2025, https://www.reuters.com/business/media-telecom/intel-gets-2-billion-lifeline-form-softbank-equity-investment-2025-08-19.

[13] “White House Reportedly Confirms US Govt in Talks over 10% Intel Stake; Move Could Erode Trust in Chip Giant,” Global Times, August 20, 2025, https://www.globaltimes.cn/page/202508/1341301.shtml.

[14] Chris Eudaily, “Intel Says Trump Deal Has Risks for Shareholders, International Sales,” CNBC, August 25, 2025, https://www.cnbc.com/2025/08/25/intel-trump-deal-risks-stock.html.

[15] Melloy and Eudaily, “Intel Surges 22% after $5 Billion Nvidia Investment.”

[16] Singh, Cherney, and Bridge, “Intel Gets $2 Billion Lifeline in the Form of Softbank Equity Investment;” and Sophia, “Intel Seeks Investment from Apple.”

[17] Eudaily, “Intel Says Trump Deal Has Risks for Shareholders, International Sales.”