Breaking: Trump’s Team Eyes Government Stake in Intel via Chips Act Funding—What It Means for Tech

Washington shakes hands with Silicon Valley—again. The Trump administration is reportedly in talks to secure a federal equity stake in Intel using funds from the CHIPS Act. No price tag disclosed, but taxpayers might want to brace for the classic 'public risk, private profit' tango.

Why it matters: This isn’t just about semiconductors. It’s a power play—one that could reshape America’s tech sovereignty… or become another case of Uncle Sam overpaying for a seat at the table. Intel’s stock reaction? Let’s just say Wall Street’s already placing bets.

Bottom line: When politics and chips collide, expect volatility. And maybe—just maybe—a side of déjà vu from the 2008 bailout playbook.

Trump courts Lip Bu Tan after blasting Intel’s leadership

Just days before the news broke, TRUMP called for Intel’s CEO to be removed. But after a private meeting, he reversed course. In a Truth Social post, Trump praised Lip’s background, calling it “an amazing story.” The change in tone came after the meeting, where Trump apparently saw value in Lip’s track record.

That includes Lip’s twelve years running Cadence Design Systems, where he cashed out $575 million worth of shares and still holds another $500 million stake. Now at Intel, Lip’s leadership has already increased the value of his personal stake by more than $29 million, according to Bloomberg’s numbers.

The deal being discussed could be the first time U.S. Chips Act funds are used to directly purchase ownership in a semiconductor company. Intel was already in line to receive $7.9 billion for commercial chipmaking and up to $3 billion more from the Pentagon for secure military-related manufacturing.

On top of that, the company has access to $11 billion in federal loans. But that hasn’t stopped Intel from slashing spending or delaying production timelines. Despite all that cash, the Ohio plant is still behind.

Bernstein analyst Stacy Rasgon, writing in a Friday note, said the firm isn’t sold on the hype. He told clients, “We’re still not hugely tempted to get involved.” Bernstein rates Intel at ‘market perform’ with a price target of $21, well below its latest close of $23.86. Rasgon said the current market reaction was mostly emotional: “The hope trade on Intel is probably back (for now) as investors wait to see if Trump can Make Intel Great Again.”

Ohio becomes the key battlefield for tech and politics

Intel’s Ohio project has taken on more than just manufacturing importance. Trump won the state three times, and Republicans flipped a Senate seat there in 2024.

His vice president, JD Vance, used to serve as Ohio’s senator, and now former Democratic Senator Sherrod Brown is preparing to fight for his seat back in 2026. That makes Ohio a key political battlefield again, and dumping government money into a high-profile factory there could help Trump tighten his grip.

The plan on the table could involve converting existing Chips Act grants into equity or pulling together a new mix of grants, loans, and other funding sources to purchase a stake. Everything is still being negotiated, and officials haven’t nailed down whether the funding will come from the original Intel package or somewhere else entirely.

Earlier in the year, Trump’s advisors floated the idea of having Taiwan Semiconductor Manufacturing Company (TSMC) help run Intel’s factories. But TSMC CEO C.C. Wei shut that down, saying the company wasn’t interested in joint operations and would stay focused on its own plans. That left the Trump administration looking for another solution, one that now looks like the U.S. might just buy in.

So far, the only ones truly winning from this are investors and Lip himself. Intel’s shares are rising based on hopes, not results. The actual factory’s still delayed, the company’s still struggling, and this deal, if it happens, just means Uncle Sam is throwing more oil into a fire that Intel started years ago.

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