Why the US government is taking a stake in Intel

The Trump administration aims to establish U.S. dominance in artificial intelligence by revitalizing domestic semiconductor manufacturing, a critical component for AI technology. To support this goal, the administration converted a government grant intended for semiconductor manufacturing into an equity stake in Intel, contingent on Intel maintaining majority ownership of its foundry business over the next five years. Intel’s foundry unit, which manufactures custom chips, has faced challenges including regulatory setbacks, leadership changes, and strategic uncertainty since its 2021 launch and subsequent failed acquisition attempts. Former Intel board member Lip-Bu Tan briefly returned in early 2025 with a turnaround plan focused on refocusing the company and workforce, but his ties to China raised concerns among U.S. lawmakers, leading to his abrupt resignation. Shortly afterward, Intel secured a significant investment from SoftBank and finalized the U.S. government’s deal, which positions the government as a passive investor aligned with Intel’s interests. This unprecedented move reflects the administration’s commitment to reshoring semiconductor manufacturing, though questions