President Trump said that Intel has agreed to give the U.S. government a 10% stake in its business.

Speaking with reporters on Friday, Mr. Trump said the deal came out of a meeting last week with Intel CEO Lip Bu Tan — which came days after the president called for Tan to resign over his past ties to China.

"I said, I think it would be good having the United States as your partner," Mr. Trump said. "He agreed, and they've agreed to do it."

EDnews informs via CBS, in a social media post Friday afternoon, Commerce Secretary Howard Lutnick indicated that the deal had been finalized, but did not elaborate.

"The United States of America now owns 10% of Intel, one of our great American technology companies," Lutnick wrote. "This historic agreement strengthens U.S. leadership in semiconductors, which will both grow our economy and help secure America's technological edge." 
 
President Trump said that Intel has agreed to give the U.S. government a 10% stake in its business.

Speaking with reporters on Friday, Mr. Trump said the deal came out of a meeting last week with Intel CEO Lip Bu Tan — which came days after the president called for Tan to resign over his past ties to China.

"I said, I think it would be good having the United States as your partner," Mr. Trump said. "He agreed, and they've agreed to do it."

In a social media post Friday afternoon, Commerce Secretary Howard Lutnick indicated that the deal had been finalized, but did not elaborate.

"The United States of America now owns 10% of Intel, one of our great American technology companies," Lutnick wrote. "This historic agreement strengthens U.S. leadership in semiconductors, which will both grow our economy and help secure America's technological edge."

 
Lutnick also thanked Tan "for striking a deal that's fair to Intel and fair to the American People."

The struggling Silicon Valley chipmaker has a market cap of just over $100 billion. The agreement comes just after Japanese technology giant SoftBank Group disclosed Monday that it is accumulating its 2% stake in Intel.

The Trump administration has been in talks to secure a 10% stake in Intel in exchange for converting government grants that were pledged to Intel under former President Joe Biden. With a 10% stake, the U.S. government would become one of Intel's largest shareholders and blur the traditional lines separating the public sector and private sector in a country that remains the world's largest economy.

Intel confirmed the deal in a news release Friday evening which stated that the U.S. government would "make an $8.9 billion investment in Intel common stock, reflecting the confidence the Administration has in Intel to advance key national priorities and the critically important role the company plays in expanding the domestic semiconductor industry."

Intel said the government's equity stake would be "funded by the remaining $5.7 billion in grants previously awarded, but not yet paid, to Intel under the U.S. CHIPS and Science Act and $3.2 billion awarded to the company as part of the Secure Enclave program."

Intel said that under the terms of the deal, the government agreed to purchase 433.3 million primary shares of Intel stock, valued at $20.47 per share, or the equivalent of a 9.9% stake in the company.    

In a Truth Social post early Friday evening, Mr. Trump wrote that it was his "Great Honor to report that the United States of America now fully owns and controls 10% of INTEL."

Trump added that the U.S. "paid nothing for these Shares, and the Shares are now valued at approximately $11 Billion Dollars."

Why did Trump want this deal?

In his second term, Mr. Trump has been leveraging his power to reprogram the operations of major computer chip companies. The administration is requiring Nvidia and Advanced Micro Devices, two companies whose chips are helping to power the craze around artificial intelligence, to pay a 15% commission on their sales of chips in China in exchange for export licenses.

Mr. Trump's interest in Intel is also being driven by his desire to boost chip production in the U.S., which has been a focal point of the trade war that he has been waging throughout the world. By lessening the country's dependence on chips manufactured overseas, the president believes the U.S. will be better positioned to maintain its technological lead on China in the race to create artificial intelligence.

Earlier this month, the president called on Tan to resign less than five months after the Santa Clara, California, company had hired him. The demand was triggered by reports raising national security concerns about Tan's past investments in Chinese tech companies while he was a venture capitalist.

But Mr. Trump backed off after Tan professed his allegiance to the U.S. in a public letter to Intel employees and went to the White House to meet with the president, who applauded the Intel CEO for having an "amazing story."

After enjoying decades of growth while its processors powered the personal computer boom, the company fell into a slump after missing the shift to the mobile computing era unleashed by the iPhone's 2007 debut.

Intel has fallen even farther behind in recent years during an artificial intelligence craze that has been a boon for Nvidia and AMD. The company lost nearly $19 billion last year and another $3.7 billion in the first six months of this year, prompting Tan to undertake a cost-cutting spree. By the end of this year, Tan expects Intel to have about 75,000 workers, a 25% reduction from the end of last year.

Has the U.S. government done something like this before?

Although rare, it's not unprecedented for the U.S. government to become a significant shareholder in a prominent company. One of the most notable instances occurred during the Great Recession in 2008 when the government injected nearly $50 billion into General Motors in return for a roughly 60% stake in the automaker at a time it was on the verge of bankruptcy. The government ended up with a roughly $10 billion loss after it sold its stock in GM.

Lutnick told CNBC during a Tuesday interview that the government has no intention of meddling in Intel's business, and will have its hands tied by holding non-voting shares in the company. But some analysts wonder if the Trump administration's financial ties to Intel might prod more companies looking to curry favor with the president to increase their orders for the company's chips.

But some analysts wonder if the Trump administration's financial ties to Intel might prod more companies looking to curry favor with the president to increase their orders for the company's chips.  

What federal grants does Intel receive?

Intel was among the biggest beneficiaries of the Biden administration's CHIPS and Science Act, but it hasn't been able to revive its fortunes while falling behind on construction projects spawned by the program.

The company has received about $2.2 billion of the $7.8 billion pledged under the incentives program