U.S. Treasury Eyes Intel Equity Stake to Supercharge Domestic Chip Production

Washington makes its biggest semiconductor bet yet—taxpayer dollars on the line for national security.

The Strategic Gambit

Federal officials are negotiating what could become one of the most significant government interventions in private industry since the 2008 bailouts. The move signals desperation to counter China's manufacturing dominance and secure supply chains for everything from defense systems to consumer electronics.

Market Reactions & Ramifications

Intel shares surged on the news while semiconductor ETFs saw unusual volume spikes. Analysts warn this sets precedent for selective industrial policy—picking winners while competitors scramble for scraps. Because nothing says 'free market' like the Treasury taking board seats.

Long-term implications could reshape global tech hierarchies, assuming the bureaucracy doesn't innovation to death with compliance requirements first.

Bessent hints that the government grant could be converted to equity

The U.S. Treasury Secretary claimed the government grant to Intel could be converted into equity. However, Kush Desai, a WHITE House spokesperson, said last week that talks about hypothetical deals should be treated as speculation unless there was official communication from the administration. Bessent did not disclose details about the size of the U.S. stake in Intel or when the Trump administration would take action on this initiative.

The Head of Technology Research at D.A. Davidson, Gil Luria, also led analysts in opposing the government’s ownership of equity in private companies. However, the research analyst noted the circumstances surrounding Intel’s case left little choice.

Direct government involvement was particularly essential in this case due to the national security problem. Recent market data showing a 7% increase in Intel’s stock price was reportedly cited as evidence that the government’s involvement could boost the chipmaker’s future performance. Cryptopolitan earlier reported that the company’s stock jumped 8% following news that the Trump administration was interested in buying a stake in Intel. 

Commerce Secretary Howard Lutnick also said the U.S. government wanted a stake in Intel in exchange for the grant support. He pointed out that the Biden administration gave away grants with no returns, but Trump aimed to change that. 

“Hey, we want equity for the money. If we’re going to give you the money, we want a piece of the action for the American taxpayer.”

–Donald Trump, President of the U.S.

Trump stressed that the country should benefit from the bargain for giving away large sums of money to a company worth over $100 billion. He believes the government should earn some type of return on investment when giving out grants to large tech firms. However, Lutnick pointed out that shifting chip manufacturing to the U.S. was more crucial to the country’s economy and security. 

Trump pushes to revive chipmaking in the U.S.

President Trump has touted major investment plans for Apple, Nvidia, and TSMC to expand their U.S. operations. He said he would push to revive chip manufacturing in the U.S., adding that this would cement the country as a tech leader. However, most big tech companies had reportedly invested in expanding their U.S. operations before Trump’s second term.

Chipmakers AMD and Nvidia also promised to pay the U.S. government 15% of their chip sales in China to get export licenses in exchange. The government’s stake in Intel is a model for other investments made by the Trump administration. However, Lutnick pointed out that such investments would not give the government any governance or voting rights. The Commerce Secretary explained that these government investments only converted grants from the Biden administration to equity under the Trump administration.

Lutnick also believes Trump should try to seek similar deals with other major chipmakers or recipients. The president recently called for more reshoring of U.S. chip manufacturing to reduce reliance on foreign companies like Samsung and TSMC.  

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