Washington takes an $8.9 billion stake in Intel as part of a CHIPS Act deal to boost domestic chipmaking

The United States government will buy $8.9 billion of newly issued Intel common stock, taking about a 9.9 percent stake. Officials describe the move as a long-term bet on domestic chipmaking. Washington agreed to buy 433.3 million primary shares at $20.47 each. This is a discount to the latest market price, Intel said.

The government will fund the purchase with $5.7 billion in CHIPS and Science Act grants that had not yet been disbursed, and $3.2 billion from the Secure Enclave program. Intel has already received $2.2 billion under CHIPS. This brings the total public investment tied to the company to $11.1 billion.

The government will hold the stake passively and take no board seat. It will generally vote with Intel's directors. The terms also give the government a five-year warrant at $20 per share for up to an additional five percent of common stock. This warrant is exercisable only if Intel's ownership of its foundry unit drops below 51 percent. Officials will remove claw-back and profit-sharing provisions attached to previously disbursed CHIPS funds.

Intel cast the deal as an endorsement of its U.S. manufacturing strategy. "As the only semiconductor company that does leading-edge logic R&D and manufacturing in the U.S., Intel is deeply committed to ensuring the world’s most advanced technologies are American made," CEO Lip-Bu Tan said. President Donald Trump previewed the agreement earlier in the day. Commerce Secretary Howard Lutnick backed the move while discussing the conversion of some CHIPS support into equity. The Wall Street Journal reported that the administration is not seeking similar stakes in other recipients, such as TSMC or Micron.

Intel highlighted the scale of its domestic build-out. The company cited $108 billion in capital spending and $79 billion in research and development over the past five years. It also has plans to invest more than $100 billion in expanding domestic sites. The company stated that its new Arizona fabs will commence high-volume production later this year. This production will use the most advanced process technology currently operating on U.S. soil. Executives from Microsoft, Dell, HP, and Amazon Web Services publicly endorsed the strategy. They highlighted its connections to artificial intelligence and supply-chain security.