President Trump said on Friday that Intel, the troubled Silicon Valley chipmaker, had agreed to sell the U.S. government a 10 percent stake in its business, worth $8.9 billion, in one of the largest government interventions in a U.S. company since the rescue of the auto industry after the 2008 financial crisis.
At a news conference, Mr. Trump said the agreement had come out of negotiations last week with Lip-Bu Tan, Intel’s chief executive.
“I said, ‘I think it would be good having the United States as your partner.’ He agreed, and they’ve agreed to do it,” Mr. Trump said. “And I think it’s a great deal for them.”
Intel said the United States would invest $8.9 billion in its stock, on top of $2.2 billion that the government has paid the company under the CHIPS and Science Act, a federal program signed into law in 2022 that delivered billions in grants to revive U.S. semiconductor manufacturing. The government will not take a board seat or have other governance rights at Intel.
“We are grateful for the confidence the president and the administration have placed in Intel, and we look forward to working to advance U.S. technology and manufacturing leadership,” Mr. Tan said in a statement.
In a social media post, Commerce Secretary Howard Lutnick called the agreement “historic” and said it would strengthen U.S. leadership in semiconductors, which act as the brains of computers and are used in everything from toasters to cars and weapons. He included a photograph of himself beside Mr. Tan, whom he thanked “for striking a deal that’s fair to Intel and fair to the American People.”
The deal is perhaps the most notable government intervention in a U.S. company since 2008, when the government poured tens of billions into Chrysler and General Motors to prevent their collapse. The agreement was also the Trump administration’s latest effort to put its own stamp on the CHIPS Act, while trying to reinvigorate Intel. Mr. Trump and other officials have derided the CHIPS Act for handing out money without getting anything in return.
Mr. Lutnick said on CNBC this week that Mr. Trump had decided to “turn the money that Biden was going to just give away” into “equity for the American people.” He added, “Donald Trump is fixing what Biden got completely, totally and utterly wrong.”
Shares of Intel rose more than 6 percent on news of the U.S. deal. Founded in 1968, the company was an industry pioneer that produced faster and increasingly powerful chips over the years, turning Silicon Valley into the bedrock of the U.S. tech sector. But Intel has been on the ropes after it missed several waves of innovation, including the smartphone and artificial intelligence revolutions. Other chipmakers, such as Nvidia, have ascended instead.
The deal with the Trump administration came together quickly. Mr. Trump had called for Mr. Tan’s resignation in a social media post this month, citing the executive’s ownership stakes in Chinese companies. Days later, Mr. Tan met with Mr. Trump at the White House and discussed giving the U.S. government an equity stake in the chipmaker.
On Wednesday, Mr. Lutnick and David Zinsner, Intel’s finance chief, reached the framework for an agreement, two people with knowledge of the discussions said. Later that day, Intel’s board blessed the deal, these people said. Mr. Lutnick and Mr. Tan settled the terms on Thursday, a person familiar with the meetings said.
Mr. Tan “walked in wanting to keep his job, and he ended up giving us $10 billion for the United States,” Mr. Trump said.
The deal could face a challenge from shareholders or others concerned about its legality. The CHIPS Act may not allow the U.S. government to convert grants into equity, lawyers and bankers who have studied the law said.
The Trump administration has taken an interventionist approach with private companies, but especially with the semiconductor industry. In recent months, the president has threatened to take away government grants from chip companies, restricted billions of dollars in sales of A.I. chips to China before changing his mind, proposed high tariffs on chips made outside the United States and demanded investments in new U.S. factories.
Mr. Trump has particularly targeted the CHIPS Act, which President Joseph R. Biden Jr. signed into law in 2022. It created $50 billion in funding to rebuild the U.S. semiconductor industry. Over the past 50 years, production of chips has shifted to Asia, with many being produced in Taiwan, a self-governing island that faces the threat of a Chinese takeover.
In March, Mr. Trump said he wanted to “get rid of the CHIP Act.” Since then, his administration has pressured chipmakers to increase their U.S. investments to receive some $36 billion in grants promised by the Biden administration.
Intel was awarded $10.86 billion in such funding: $3 billion to produce chips for the Defense Department and $7.86 billion for projects in Arizona, New Mexico, Ohio and Oregon.
The Biden administration had debated how heavily to subsidize Intel, seeing it as an important American company but a troubled one. Shortly after the company received approval of its $7.86 billion federal grant, it fired its chief executive, Pat Gelsinger.
In March, Intel hired Mr. Tan, a well-regarded semiconductor investor and manager, to fix the business. He outlined a plan to cut staff, develop a new A.I. strategy and focus on finding customers for a future iteration of Intel’s chip-making technology.
At the same time that Mr. Trump pressured Mr. Tan to resign, the administration was withholding some of Intel’s federal grants, according to the company’s financial filings. Intel, which had received $2.2 billion of the money it was awarded, said in a filing in June that it had submitted a request for an additional $850 million in reimbursements that it had not received.
A White House official said Intel’s prospects warranted federal government involvement given the importance of semiconductors to the economy. The official said the government was exploring other actions it could take to shore up Intel’s position, but declined to specify.
Having the government be an investor in Intel could add to the perception that the company is too big to fail. It is also likely to raise questions about whether Mr. Trump and other U.S. officials could ultimately play a role in pressuring other companies to become Intel customers.
A government stake may not solve Intel’s problems. The company has struggled to compete in producing the latest chips. Even if the Trump administration leans on companies like Apple, Nvidia and Qualcomm to buy from Intel, it remains to be seen if Intel can make the products that tech companies demand.
“Once the government becomes a stakeholder, the question is: What will they do to protect their investments?” said Ben Bajarin, principal analyst at Creative Strategies, a tech research firm. “You don’t want to force companies to choose Intel. You want them to willingly choose to use Intel, but you may need to create incentives like tax breaks.”
Tripp Mickle reports on Apple and Silicon Valley for The Times and is based in San Francisco. His focus on Apple includes product launches, manufacturing issues and political challenges. He also writes about trends across the tech industry, including layoffs, generative A.I. and robot taxis.
Lauren Hirsch is a Times reporter who covers deals and dealmakers in Wall Street and Washington.
Ana Swanson covers trade and international economics for The Times and is based in Washington. She has been a journalist for more than a decade.
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