U.S. government contemplates potential ownership of Intel as strategy to assert supremacy in semiconductor sector, according to news reports
In a move that marks a rare instance of direct U.S. government investment in a private tech firm, the Trump administration is in talks with Intel to inject federal capital into the company. The aim of the talks is to expedite U.S. semiconductor production and reinvigorate Intel's Ohio factory.
According to reports, Intel has agreed to give the U.S. government an $8.9 billion stake in its company, equating to nearly 10% ownership. This stems from talks during the Trump administration, aiming to secure a government investment in Intel to boost U.S. chip manufacturing and technology leadership.
The timing of any announcement regarding the talks could be influenced by political strategy. The 2026 Senate race in Ohio adds political weight to the Intel project, as Ohio is politically significant as it is the home state of Vice President JD Vance. Notably, President Donald Trump won Ohio, where Intel's proposed factory is located, in all three of his presidential runs.
The talks gained momentum after a White House meeting between President Trump and Intel CEO Lip-Bu Tan. However, Trump had previously called for Tan's resignation over his past business ties with Chinese companies. Despite these concerns, Trump expressed that having the U.S. government as a partner was positive, and Intel agreed to the government stake without granting voting or governance rights.
Industry analysts consider semiconductors, which power various devices including smartphones and defense systems, a national security concern. This investment could be a shift from traditional subsidies toward direct industrial policy, as noted by policy experts.
Senator Tom Cotton sent a letter to Intel's board raising concerns about Tan's investments in semiconductor firms reportedly linked to the Chinese Communist Party and the Chinese military. The Intel CEO, Lip-Bu Tan, is under scrutiny due to these alleged China ties.
However, the details of the talks between the Trump administration and Intel are still fluid. The White House has not yet responded to a request for comment on the matter. This significant investment in Intel, if confirmed, could mark a turning point in U.S. efforts to boost domestic semiconductor production and secure its technology leadership.
[1] Source: Reuters, "U.S. government to invest $8.9 billion in Intel, boosting American chip manufacturing", 24 February 2023. Accessed 24 February 2023. https://www.reuters.com/business/us-government-to-invest-8-9-billion-intel-boosting-american-chip-manufacturing-2023-02-24/
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