Trump Administration Intel Funding: Reallocated Grants

Intel and the U.S. Government Reach Investment Agreement

Intel formally declared an agreement with the administration of President Donald Trump on Friday afternoon. This announcement followed Trump’s earlier statement regarding a prospective 10% government stake in the semiconductor manufacturer.

Intel clarifies that the government is making an “$8.9 billion investment in Intel common stock.” However, the administration isn’t introducing new capital. Instead, it is fulfilling previously committed obligations.

Details of the Investment

The $8.9 billion will be sourced from funds already allocated to Intel. Specifically, $5.7 billion stems from grants awarded but not yet disbursed under the Biden administration’s CHIPS Act. An additional $3.2 billion comes from the Secure Enclave program, also awarded by the Biden administration.

On his social media platform, Truth Social, Trump asserted, “The United States paid nothing for these shares.” He characterized the arrangement as “a great Deal for America and, also, a great Deal for INTEL.”

Trump’s Stance on the CHIPS Act

Despite this deal, Trump has previously voiced criticism of the CHIPS Act. He has labeled it a “horrible, horrible thing” and urged House Speaker Mike Johnson to repeal it.

In a June regulatory filing, Intel disclosed receiving $2.2 billion in CHIPS Act funding. The company simultaneously requested an additional $850 million in reimbursements, which remain unpaid.

Potential Legal Challenges

Some legal and banking professionals suggest the CHIPS Act may not permit the conversion of grants into equity. This raises the possibility of legal challenges to the current agreement, as reported by The New York Times.

Shifting Views on Intel’s CEO

Earlier this month, Trump accused Intel CEO Lip-Bu Tan of potential conflicts of interest, calling for his immediate resignation. However, his tone shifted on Friday.

Trump stated on Truth Social that he “negotiated this deal with Lip-Bu Tan, the Highly Respected Chief Executive Officer of the Company.”

Statements from Intel and the CEO

Lip-Bu Tan expressed gratitude for the confidence shown by the President and the administration. He affirmed Intel’s commitment to advancing U.S. technology and manufacturing leadership.

Terms of the Government’s Investment

Intel’s announcement emphasizes that the government’s investment will be entirely passive. This means no board seats or governance rights will be granted.

The investment will not include any information rights related to Intel’s operations.