Santa Clara, California — In a significant move for the tech industry, Intel announced a partnership with the Trump administration on Friday, establishing a deal where the U.S. government will acquire a 10% stake in the beleaguered semiconductor firm. This follows President Trump’s earlier declaration of intent for government investment, affirming a commitment to bolster the domestic chip manufacturing landscape.

The agreement centers on an $8.9 billion investment that Intel claims stems from funds previously allocated but not disbursed by the government. This investment includes approximately $5.7 billion tied to the Biden administration’s CHIPS Act and an additional $3.2 billion linked to the Secure Enclave program, both initiatives aimed at enhancing U.S. semiconductor production capabilities.

In a post on Truth Social, Trump emphasized that the government does not spend taxpayer money acquiring these shares, branding the agreement as mutually beneficial for both national interests and Intel. Despite his newfound enthusiasm for the deal, Trump previously criticized the CHIPS Act as detrimental, urging Congress to dismantle it.

Intel has acknowledged receiving $2.2 billion in funding under the CHIPS Act, yet the company noted it is still awaiting a reimbursement of $850 million that it requested earlier this year. Concerns about the legality of this new agreement have arisen, as some financial experts suggest the CHIPS Act may not allow federal grants to be converted into equity stakes, potentially setting the stage for future disputes.

As tensions between the administration and the semiconductor industry continue, Trump has previously called for Intel CEO Lip-Bu Tan’s resignation over alleged conflicts of interest. However, in light of the recent agreement, Trump expressed renewed confidence in Tan, highlighting his role in facilitating this partnership.

Tan, for his part, reflected on the significance of the agreement, expressing gratitude for the administration’s faith in Intel and its commitment to advancing U.S. technological leadership and manufacturing. The company’s announcement clarified that the government’s stake will be passive, meaning it will not involve representation on Intel’s board or governance rights, thus maintaining the company’s operational autonomy.

The deal marks a pivotal moment in the ongoing dialogue surrounding U.S. semiconductor manufacturing, with potential implications for national security and economic stability. As the landscape evolves, both Intel and the government are poised to navigate the complexities of this partnership in pursuit of a stronger domestic chip industry.