A few days after the CEO of Intel talks about Trump called “ highly conflicting ”, the federal government would have negotiated participation in the champion of chips

This type of direct government investment in a technology giant marks a notable department of the more practical approach favored by almost all previous American administrations. Traditionally, federal support for the manufacture of Tamines has mainly came in the form of subsidies or subsidies, such as those allocated under the flea law. Trump’s approach seems to promote direct participations, echoing recent white house movements in other sectors, such as the federal government taking a “gold share” while allowing Nippon Steel to acquire US Steel, and the Ministry of Defense buying $ 400 million in privileged shares in MP Materials, a mineral minerals.

Motivations and political context

The justification for this decision is focused on strengthening the technological independence from the United States, Intel being the only large company of semiconductors producing high-scale advanced fleas in the United States, its planned mega-plant in Ohio-was originally announced in 2022 as world leaders such as TSMC and Samsung.

The semiconductor sector is increasingly considered to be crucial for everything, from smartphones to arms. Trump criticisms often cite “state capitalism”, but supporters argue that direct support for Intel is essential for national security, technological leadership and economic growth, especially when China, Taiwan and South Korea pour out resources in their own flea industries.

The current situation in Intel

Intel was in shock from a set of reverse. In 2024, its stock lost 60% of its value – the strongest decline in its history. The company has missed key opportunities in AI fleas, and its foundry business, aimed at producing fleas for other companies, would find it difficult to gain from major customers.

The new CEO of Intel, LIP-BU Tan, was appointed after the board of directors ousted Pat Gelsinger last year in order to accelerate a reversal. Tan has already reduced the ambitions of the Ohio factory, postponed extensions and adopting a cautious approach and focused on demand. His previous investments with Chinese semiconductor companies aroused criticism after a Bombshell Reuters investigation in April – so much so that President Trump publicly called his resignation last week for allegations that Tan was “very conflicting” with his links with Chinese entities. Tan has held a meeting with Trump in the White House since, that Trump called “very interesting”, adding that Tan has “an incredible story”. People familiar with the case were told Bloomberg The fact that the current investment plan stems from these crisis talks.

Before Trump’s declaration, four former Directors of Intel published an exclusive comment to FortuneSaying that the company was likely to withdraw as champion of American chips. After the president’s declaration, they pleaded for a separation of the essential “foundry” company of Intel which is so central to national security.

The old CEO of Intel, Craig Barrett, has since provided a comment to Fortune On how to save the business, call Intel “in poor species” and not to afford “investments in the capacity necessary in the future to replace (semiconductor rival) TSMC or even a reasonable fraction of TSMC capacity.” Barrett added that Intel probably needs a cash infusion of around $ 40 billion to be competitive. “Realisticly that investment represents 100% of capital subsidies (chips) Act so unlikely that the (American government) is the Savior.” Bloomberg Subsequently, reported that the Trump administration was planning to use CHIPS ACT funds to finance at least partially the purchase of a share participation in Intel, citing people familiar with the issue.

The White and Intel House did not respond to FortuneComment requests.

For this story, Fortune Used a generative AI to help an initial project. An editor checked the accuracy of the information before the publication.