On August 22, Intel announced an $8.9 billion investment agreement with the U.S. government, giving Washington a 10% stake in the chipmaker. The deal, confirmed by Commerce Secretary Howard Lutnick, reflects the Trump administration's push to strengthen America's semiconductor leadership through direct equity ownership.

Under the agreement, the government will purchase 433.3 million Intel shares at $20.47 each, below market value. Funding comes from $5.7 billion in previously approved but unpaid CHIPS Act grants and $3.2 billion under the Secure Enclave program. In addition, Washington will receive a five-year warrant to buy another 5% stake if Intel loses majority control of its foundry operations. The government emphasized that its ownership will remain passive, with no board seats or governance rights.

Intel CEO Lip-Bu Tan welcomed the move, calling it "a historic investment" that supports advanced chip manufacturing in the U.S. Lutnick described the agreement as one that strengthens economic growth, national security, and America's position in artificial intelligence.

Intel shares rose 5.5% to close at $24.80 on Friday following Trump's earlier remarks about the deal. The company is simultaneously expanding its U.S. manufacturing capacity with more than $100 billion in planned investments, including a new Arizona facility expected to begin mass production later this year.

The intervention, however, has raised concerns about growing government influence in corporate affairs. Critics point to recent cases, such as the administration securing profit-sharing rights from Nvidia's China sales, as evidence of a new model of state involvement in strategic industries.

Meanwhile, Taiwan Semiconductor Manufacturing Co. (TSMC) executives have reportedly begun discussing whether to return previously awarded CHIPS Act subsidies to avoid similar equity demands. According to The Wall Street Journal, the Trump administration is considering converting subsidies for companies like TSMC, Samsung, and Micron into partial ownership stakes, though officials later suggested such arrangements may be limited to financially strained firms like Intel.

TSMC has received $1.5 billion of a promised $6.6 billion in direct grants for its Arizona operations but has since announced an additional $100 billion U.S. investment without requesting further support. Given its strong financial position — with $90 billion in revenue and $36 billion in net profit in 2024 — the company is reluctant to cede equity. Its U.S. subsidiary has already achieved profitability within months of starting production, underscoring that its American operations do not require external capital.

The diverging paths of Intel and TSMC highlight a broader debate over whether government subsidies should evolve into ownership stakes. For now, the Intel deal underscores Washington's willingness to directly intervene in strategic industries, while other global chipmakers weigh how far they are willing to accept U.S. conditions.