Trump Converts CHIPS Act Grants to Government Equity Stake in Intel

Commerce Secretary Howard Lutnick announced the U.S. government would take a 10% equity stake in Intel worth $8.9 billion, converting previously committed CHIPS Act grants into government ownership. SoftBank simultaneously invested $2 billion, purchasing 2% of Intel. The equity-for-funding model represents a fundamental policy shift from the Biden administration’s grant approach.

Context: The government purchased 433.3 million Intel shares at $20.47 per share, funded by converting $5.7 billion in remaining CHIPS Act grants and $3.2 billion from the Secure Enclave program. The investment includes a five-year warrant for an additional 5% at $20 per share, exercisable if Intel divests 51% of its foundry business. Lutnick stated this ’equity-for-funding’ approach is now standard for all CHIPS Act recipients.

Significance: Converting public grants to government equity stakes in private companies mirrors state-capitalist models from Russia and China. The policy shift enables the administration to claim ownership and control over strategic companies while requiring them to surrender equity for previously promised grants, fundamentally altering the relationship between government funding and corporate independence.