U.S. Government Acquires a 9.9% Share in Intel Corporation - Trump Administration to function as a passive shareholder, without securing a spot on the board of directors (Latest Update)
In a significant move for the U.S. tech industry, the government has announced an investment of approximately $8.9 billion in Intel Corporation. This investment, made in the form of a purchase of 433.3 million shares of Intel common stock at $20.47 per share, was confirmed earlier this week.
The deal, which was initially reported by the Associated Press and tweeted out by Commerce Secretary Howard Lutnick, is seen as a boost to U.S. economic and national security. Intel is the only semiconductor company that does leading-edge logic R&D and manufacturing in the U.S., making this investment crucial for ensuring that the world's most advanced technologies are American-made.
The investment reflects the confidence the U.S. Administration has in Intel to advance key national priorities and expand the domestic semiconductor industry. The White House, however, is not looking to convert the grants into equity stakes for Intel, but this does not appear to be the case for TSMC and Micron.
The government does not have a seat on Intel's board, but has an agreement to vote with the board on matters requiring its approval, with limited exceptions. The terms of the deal have been finalised, and the investment is expected to ensure a strong future for Intel and the U.S. tech industry.
The announcement was made by Intel's CEO, Lip-Bu Tan, in a press release. The deal has been teased out all week, with the possibility of CHIPS Act grants being converted into equity being discussed. However, the U.S. government is not looking for equity in companies that are upping their domestic investments, as reported earlier today by The Wall Street Journal.
The money for the investment comes from $5.7 billion in grants from the CHIPS and Science Act and $3.2 billion for the Secure Enclave program. The purchase price for each share is a discount to the current market price, offering a strategic advantage for the U.S. government's investment.
As of Friday, Intel (INTC) opened at $23.65 and ended the trading day up 5.53% at $24.80. The investment is expected to have a positive impact on Intel's stock price and the overall U.S. tech sector.
An update on the news was reported at 5:09 p.m. ET on August 22, marking a significant milestone in the U.S. government's efforts to strengthen its domestic tech industry and secure its position as a global leader in technology.
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