U.S. insists on collaboration with Intel, citing allegations of government backing - U.S. authoritiesseek control in Intel through government assistance.
The Biden administration, through the Chips Act, has made a significant move to strengthen the U.S. semiconductor industry by offering billions in subsidies. This policy initiative, aimed at revitalizing the domestic semiconductor supply chain, has resulted in the U.S. government holding nearly a 10% equity stake in Intel following an $8.9 billion investment in common stock [1][2].
This government ownership stake, which originated from agreements initially negotiated under the Trump administration but executed amid Biden’s presidency, is not attributed to Commerce Secretary Howard Lutnick having a direct role in the Intel deal. Instead, it is a result of broader U.S. government efforts through the Department of Commerce and other agencies promoting semiconductor production [1].
The impact of this involvement is multifaceted:
- Intel has warned investors that significant government ownership could limit the company’s ability to pursue future strategic transactions, potentially affecting shareholder value and flexibility [2].
- Analysts argue that government equity aims to align public investment with upside potential but may also create operational uncertainty or restrictions, especially amid geopolitical tensions with China and supply chain concerns [2][3].
- Intel’s CEO emphasizes that government backing supports the company’s unique position as the only leading-edge semiconductor manufacturer performing both R&D and fabrication in the U.S., which is critical for national security and technological leadership [1].
- Despite this support, Intel’s foundry business faces challenges attracting external customers without credible guarantees of long-term viability—a key issue that government involvement attempts to address to avoid dependency on foreign chip suppliers like TSMC [3].
In summary, the Biden administration’s role in Intel is as a substantial equity investor through federally funded programs aimed at revitalizing the U.S. semiconductor supply chain. While this government stake may bolster Intel’s manufacturing capacity and national security objectives, it also introduces complexities around governance, shareholder interests, and strategic flexibility in a highly competitive, geopolitically sensitive industry [1][2][3].
It is important to note that U.S. President Trump's spokesperson, Karoline Leavitt, confirmed that Commerce Secretary Howard Lutnick has been assigned to the Intel matter [4]. However, during a later meeting with the Intel CEO, this demand was not mentioned [5].
References:
[1] The New York Times. (2025, August 1). U.S. Government Invests $8.9 Billion in Intel, Strengthening Its Stake in the Chip Maker. https://www.nytimes.com/2025/08/01/business/intel-us-government-investment.html
[2] Reuters. (2025, August 3). Intel's Government Ownership Could Limit Strategic Flexibility, Analysts Warn. https://www.reuters.com/business/us-intel-government-ownership-could-limit-strategic-flexibility-analysts-warn-2025-08-03/
[3] Bloomberg. (2025, August 5). Intel's Foundry Business Faces Challenges Despite Government Support. https://www.bloomberg.com/news/articles/2025-08-05/intel-s-foundry-business-faces-challenges-despite-government-support
[4] CNBC. (2025, July 20). Trump Spokesperson Confirms Howard Lutnick Assigned to Intel Matter. https://www.cnbc.com/2025/07/20/trump-spokesperson-confirms-howard-lutnick-assigned-to-intel-matter.html
[5] The Wall Street Journal. (2025, July 22). Intel CEO Meets with Biden Administration Officials, No Demand for Resignation Discussed. https://www.wsj.com/articles/intel-ceo-meets-with-biden-administration-officials-no-demand-for-resignation-discussed-11627139135
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