Economists and tech analysts are divided over President Donald Trump’s decision to give the U.S. government a 10% stake in Intel Corporation INTC, with some calling it unconstitutional and others praising it as crucial for national security and semiconductor independence.
Trump Announces Historic Intel Stake
Intel shares climbed in after-hours trading on Friday after Trump took to Truth Social to reveal that the U.S. now “fully owns and controls 10% of Intel,” valued at about $11 billion.
Trump said he negotiated the deal with CEO Lip-Bu Tan, declaring it a “great deal for America” that would cement the country’s leadership in advanced chip manufacturing.
Intel also confirmed that the stake includes an $8.9 billion investment funded by $5.7 billion in unpaid CHIPS Act grants and $3.2 billion from the Secure Enclave program.
The government’s investment brings its total support to Intel to $11.1 billion.
This development follows SoftBank Group’s SFTBF SFTBY recent $2 billion investment in Intel, which secured the Japanese conglomerate an approximately 2% stake in the chipmaker.
See Also: Under AMD, Qualcomm Competitive Heat, Intel Gets Hit With Fitch Credit Downgrade
Schiff Blasts Move As ‘Unconstitutional’
Economist Peter Schiff criticized the equity purchase, warning it erodes free-market principles. “The U.S. Govt. taking a 10% stake in $INTC is not only unconstitutional, it’s a bad idea,” Schiff posted on X, formerly Twitter.
“Trump wasn’t hired to run a hedge fund. This sets a very bad precedent as it moves our nation further away from free-market capitalism.”
When asked, isn’t it better to invest rather than give billions in grants, Schiff replied, “We shouldn’t do that either. But we don’t want the government to buy into private businesses.”
Newman Defends Strategic Investment
Daniel Newman, CEO of Futurum Group, argued the move is vital for U.S. technology leadership. “Funny to see some of the same people that cheered about ‘Chips Act Grants’ losing their minds about the government investing in INTC,” Newman wrote on X.
“Being able to manufacture leading-edge chips independent of Taiwan is existential. Or risk falling behind in AI and falling behind as the world’s economic leader.”
Earlier this week, Commerce Secretary Howard Lutnick stressed the importance of producing chips in the U.S. rather than relying on Taiwan, home to Taiwan Semiconductor Manufacturing Co. TSM and just 80 miles from China.
As per reports, TSMC is responsible for producing over 90% of the world’s most advanced computer chips.
Trump’s Involvement In The Broader Semiconductor Market
The announcement underscores Trump’s semiconductor strategy, which includes 100% tariffs on foreign-made chips unless companies commit to U.S. manufacturing.
The administration has touted investments from Nvidia Corporation NVDA and Intel as national security victories.
Notably, just earlier this month, Trump demanded Intel CEO Tan’s immediate resignation after reports surfaced regarding his alleged ties to China.
Price Action: Intel stock closed up 1.05% in after-hours trading on Friday, according to Benzinga Pro.
According to Benzinga’s Edge Stock Rankings, INTC continues to display an upward price trend across short, medium and long-term periods. Additional performance details are available here.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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