US President Donald Trump Pushes Out Intel CEO Lip-Bu Tan, Buys Nearly 10% Of Company For $8.9 Billion

Days after calling for Intel CEO Lip-Bu Tan to step down, President Donald Trump announced that the U.S. government will buy a 9.9% stake in the struggling chipmaker. The $8.9 billion purchase will be made under a new deal that turns federal grants into equity, according to a report from Reuters.

The government will buy 433.3 million shares at $20.47 each, about $4 less than Intel’s recent closing price of $24.80. The money will come from two key sources: $5.7 billion from CHIPS Act grants and $3.2 billion from the Secure Enclave program. Intel will receive roughly $10 billion in funding to expand its U.S. manufacturing operations.

A CEO on the Edge, a Deal on the Table

Trump met with CEO Lip-Bu Tan on Friday, August 22. “He walked in wanting to keep his job, and he ended up giving us $10 billion for the United States,” Trump said. “So we picked up $10 billion.” Tan offered a more measured response, saying, “We are grateful for the confidence the president and the administration have placed in Intel.”

Commerce Secretary Howard Lutnick confirmed the deal in a post on X, calling it “fair to Intel and fair to the American People.” Under the agreement, the government will take a passive role, no board seat and limited voting rights. However, it holds a five-year option to buy an additional 5% if Intel loses control of its foundry business.

More Than Money: Can Intel Catch Up?

While the deal gives Intel a much-needed cash boost, it comes amid significant struggles. The company posted an $18.8 billion loss in 2024 and has had weak cash flow since 2021. Despite the funding, experts warn that money alone won’t solve Intel’s deeper problems.

“Without government support or another financially stronger partner, it will be difficult for the Intel foundry unit to raise enough capital,” said Daniel Morgan of Synovus Trust. He added that Intel still lags behind TSMC in foundry technology and needs to catch up to attract business. It’s also trailing rivals like AMD in processors and Nvidia in AI areas where growth is booming.

For new CEO Lip-Bu Tan, the pressure is now higher than ever to lead a turnaround. Whether this bold government bet pays off remains to be seen.