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Intel filing shows risks of US government stake
The US government now has a significant stake in Intel’s business. This could effect its ability to obtain grants from other governments
While the CEOs of the major tech firms have lined up to support the Trump administration’s 9.9% equity stake in chipmaker Intel, the company itself sees many potential adverse effects going forward.
A few weeks ago US president Donald Trump questioned the suitability of Intel CEO Lip-Bu Tan, claiming he had links to China. The pair then met. Intel described the meeting as “a candid and constructive discussion” on Intel’s commitment to strengthening US technology and manufacturing leadership. Now, the US government has taken a significant stake in the company.
The wording of the agreement suggests the US government is making an $8.9bn investment in Intel, but what appears to have happened is that the US Department of Commerce has used funding provided by the previous administration’s US Chips Act, covering $5.7bn of grants together with $3.2bn awarded to the company in 2024 as part of the Secure Enclave programme, which provides semiconductor technology to the Department of Defence.
Amazon Web Services and Microsoft along with HP and Dell welcomed the US government investment.
“The industry needs a strong and resilient US semiconductor industry, and no company is more important to this mission than Intel,” said Michael Dell, chairman and chief executive officer at Dell Technologies. “It’s great to see Intel and the Trump Administration working together to advance US technology and manufacturing leadership.
“Dell fully supports these shared priorities, and we look forward to bringing a new generation of products to market powered by American-designed and manufactured Intel chips.”
But as these companies try to win in the artificial intelligence (AI) arms race, Intel’s grip on the x86 PC and server market is under threat as rival chips offer better performance needed to run AI and high performance workloads. The 27 August PassMark high-performance benchmark for processors has 24 AMD processors ahead of Intel’s first entry, and it is third, behind two AMD chips, when measured against price and performance.
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In a US Security and Exchange Commission (SEC) filing, Intel said the conversion of future grant funding into investments in common stock by the US government means it no longer benefits from the reduced future operating costs made possible by such grant funding.
Given Intel is a highly capital intensive business and has other grant arrangements with government entities, the SEC filing noted that these grants could also be converted into common stock in the future or there could be an unwillingness to provide further grants to support its expansion.
Intel also warned that its non-US business may be adversely impacted by the US government being a significant stockholder. Given that sales outside the US accounted for 76% of the company’s revenue for the fiscal year ended 28 December 2024, it said that having the US government as a significant stockholder could lead to additional regulations, obligations or restrictions, such as foreign subsidy l in other countries.
The SEC filing also notes that with the US government as a major shareholder, the company could experience adverse reactions from investors, employees, customers, suppliers, other business or commercial partners, foreign governments, or competitors. It could also face increased public or political scrutiny.
How safe is Intel Ireland?
Since 1989, Intel has developed a site in Leixlip, Ireland. The Irish government’s national semiconductor strategy notes that Intel Ireland offers a proven model of strategic investment, global integration and national benefit, which demonstrates how long-term industrial partnerships can anchor a country’s position in the global semiconductor landscape.
Its annual report filed at the end of January 2024 shows that Intel recognised $384m of grants and refundable tax credits in 2024 ($645m in 2023), the majority of which related to the expansion of silicon wafer manufacturing facilities in Ireland.
