The Intel Deal - a Billion-Dollar Deception

Donald Trump likes to present himself as a brilliant dealmaker. On August 22, 2025, he triumphantly declared that the United States had now "received ten percent of Intel for free" - a stake he praised in the highest terms as a historic victory for America. But as so often, the truth behind Trump’s words is another: instead of a "gifted" billion-dollar deal, it is an investment of nearly 8.9 billion US dollars, financed by taxpayers’ money and government programs. In fact, Intel itself confirmed in its press release that the US government had acquired a 9.9 percent stake in the company. This was not paid for out of a supposed "zero sum game", but through funds that were already bound in the federal budget: around 5.7 billion US dollars from the CHIPS Act of 2022, supplemented by 3.2 billion US dollars from the Secure Enclave Program. Trump presents it as a gift - in reality it was a diversion of subsidies that had already been approved to strengthen US semiconductor production.

Why then this step? Intel has been in a deep crisis for years: the former industry leader has lost market share to TSMC, Samsung and other competitors. Production problems, delays in new chip generations and weakened investor confidence have put the company in a difficult position. For the US government, however, a weakened Intel means not only an economic but above all a geopolitical risk. Dependence on Taiwan, where the majority of the most advanced chips are manufactured, is considered a strategic Achilles heel in light of tensions with China. With this stake Washington wants to ensure that an American champion in the chip sector does not fall by the wayside. Yet the form of the deal is unusual and carries risks. Jurists like Brian Quinn of Boston College Law School criticize that the state acquired common stock – instead of preferred stock, which would grant priority dividends or redemption rights. Thus the US government holds nearly 10% of the company but has no seat on the board and no special governance or information rights; formally, as the holder of common stock, it has voting rights, but it has contractually committed to exercise them in line with management and thereby to waive its voting power. In other words: America is paying billions, bearing the risk – and receiving only a passive stake with minimal actual influence, whose value depends on Intel’s success or failure.

"It is a great honor to report that the United States of America now fully owns and controls 10% of INTEL, a great American company with an even more incredible future. I negotiated this deal with Lip-Bu Tan, the highly respected CEO of the company. The USA paid nothing for these shares, and the shares are now valued at approximately 11 billion dollars. This is a great deal for America and also a great deal for INTEL. Building leading edge semiconductors and chips, which is exactly what INTEL does, is fundamental to the future of our nation. MAKE AMERICA GREAT AGAIN! Thank you for your attention to this matter."

Trump conceals this fact. Instead he boasts that he "simply negotiated ten percent" - a portrayal that is as misleading as it is dangerous. For it conceals that it is the taxpayers who are guaranteeing a company that has accumulated its own management failures over many years. While Trump speaks of a "gifted billion-dollar deal", he is tying public funds into a risky bet on the future of a corporation that still has to prove itself. The motives behind the step are understandable: semiconductors are the backbone of the modern economy, from smartphones to cars to weapons systems. Whoever controls chips controls the technological future. That the US does not want to leave this strategic field to China or Taiwan is rational. But the form of the entry, the lack of transparency of the agreement and the political exaggerations by Trump raise questions that cannot be covered with patriotic slogans. The risks are considerable. Should Intel continue to struggle to regain its technological leadership, not only one company will lose value - but the American taxpayer billions. In addition, the entry opens the door to a new form of state industrial policy, in which companies hope for political deals instead of competing in the market. Trump himself remains true to his line: he sells a costly, risky market intervention as a personal triumph, as if he had "gifted" something to the nation. In reality it is another example of the gap between his rhetoric and reality. The Intel deal may have been necessary to support a key industry. But the way it came about and the way it is presented once again shows: Trump is lying when he claims that the US paid "nothing" for it. It was paid for - and dearly.

Investigative journalism requires courage, conviction – and your support.