Intel Receives $5.7 Billion U.S. Investment Deal Amid Struggles in Chip Market
Intel’s Chief Financial Officer, David Zinsner, has confirmed that the company received $5.7 billion in federal funding as part of a new deal with the administration of U.S. President Donald Trump. The move comes as Intel faces rising competition in the global semiconductor market and works to secure its role in domestic chip manufacturing.
Government Takes 10% Stake in Intel
Speaking at an investor conference on Thursday, Zinsner revealed the funds were transferred Wednesday evening. As part of the agreement, the U.S. government will acquire a 10% stake in Intel, headquartered in Santa Clara, California.
Additionally, the deal includes a five-year warrant that would allow the government to claim an extra 5% of Intel shares if the company’s ownership in its manufacturing operations falls below 51%.
“I don’t think there’s a high likelihood that we would take our stake below 50 percent,” Zinsner said, adding that he expects the warrant to expire without being exercised.
CHIPS Act Funds Converted Into Equity
The investment stems from funds originally allocated to Intel under the 2022 CHIPS and Science Act, a law signed by former President Joe Biden to boost U.S. semiconductor production. The Trump administration converted part of those funds into equity to secure a government stake in the company.
However, White House Press Secretary Karoline Leavitt emphasized that details of the agreement are still being finalized. “The Intel deal is still being ironed out by the Department of Commerce. The Ts are still being crossed, the I’s are still being dotted,” she said Thursday.
Intel’s Foundry Future in Question
The deal comes at a crucial time for Intel, which has been restructuring its business. The company has separated its chip design and foundry operations, placing its manufacturing arm under a separate management board.
Zinsner suggested Intel may seek a strategic investor for its foundry division in the future, though that decision is still years away. He also stressed that the company’s future depends heavily on winning a major customer for its next-generation manufacturing process, known as 14A technology. Without such a deal, Intel could be forced to scale back or exit its foundry business altogether.
Still, Zinsner downplayed immediate concerns, saying: “The lawyers are always looking for areas where we should be elaborating in terms of our risks.”
Competition With NVIDIA Heats Up
Intel’s challenges come as competitors like NVIDIA surge ahead. On Wednesday, NVIDIA reported stronger-than-expected quarterly earnings, fueled by skyrocketing demand for artificial intelligence (AI) chips.
Industry analyst Dan Ives of Wedbush Securities said NVIDIA remains the dominant force in the market. “With AI infrastructure investments projected to reach $3 trillion to $4 trillion by the end of the decade, the chip landscape remains NVIDIA’s world,” Ives explained. “Everybody else is paying rent as sovereigns and enterprises line up for the most advanced chips.”
What This Means for U.S. Tech and Manufacturing
The Intel deal underscores the U.S. government’s push to strengthen domestic semiconductor production and reduce reliance on foreign suppliers, especially amid growing competition with China. While the investment offers Intel short-term relief, its long-term success will hinge on innovation, strategic partnerships, and the ability to compete with global chip leaders.