- The US Government is set to acquire 10% of Intel in exchange for 433 million shares
- But Intel is worried about Trump’s “substantial additional powers” on foreign business
- Trump praised the deal for making the US “richer”, and for creating more jobs
The upcoming US Government ownership deal could have knock-on effects on how Intel deals with foreign customers and governments in the future, which could be further amplified by Trump’s unpredictable trade and tariff policies, the company has admitted.
The US Government is set to acquire a 10% stake in Intel through a mix of unpaid CHIPS Act grants and funding in a deal valued at around $8.9 billion in total.
In exchange, Intel will hand over 433 million shares to the government, worth between $10-11 billion.
Intel could be affected by its US ownership
The tricky part comes in the form of foreign business, because around 76% of Intel’s fiscal 2024 revenue came from abroad, with popular markets including China, Singapore and Taiwan.
Being part-owned by the US Government means Intel could be exposed to foreign subsidy laws, extra regulations, lawsuits, political scrutiny and competitor pushback that could seriously hamper its foreign sales.
“Having the US Government as a significant stockholder of the Company could subject the Company to additional regulations, obligations or restrictions, such as foreign subsidy laws or otherwise, in other countries,” Intel wrote in a SEC filing.
Intel also noted that the US Government’s interests may not reflect those of its existing shareholders, and that its “substantial additional powers” could prevent it from pursuing “potential future strategic transactions” at the benefit of shareholders.
President Trump welcomed the deal, claiming it made the US $11 billion at zero cost. “I PAID ZERO FOR INTEL, IT IS WORTH APPROXIMATELY 11 BILLION DOLLARS. All goes to the USA,” he wrote on Truth social media.
The post goes on to explain how Intel’s stock price could go up while the US would become “RICHER, AND RICHER.” Trump also noted that the deal would generate “more jobs for America!!!”
“It is difficult to foresee all the potential consequences,” Intel concluded.
Intel’s latest quarterly revenue remained flat year-over-year at $12.9 billion, under the leadership of new CEO Lip-Bu Tan.
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