The optimism surrounding Intel has taken a sharp hit as details of the Trump administration’s support plan emerge. Instead of the massive funding boost many investors expected, Bloomberg reports that the administration is considering taking just a 10% stake in the company – a little over $10 billion based on Intel’s current valuation.
Markets reacted immediately, with Intel’s stock sliding roughly 5% as doubts grew over whether such a sum could meaningfully accelerate Intel’s long-delayed Ohio chip plant, now projected to be operational only in the 2030s.
The administration has framed the move as an effort to strengthen domestic semiconductor manufacturing, but investors see trouble in the details. Converting previous CHIPS Act grants into equity is on the table, effectively diluting shareholders rather than injecting fresh capital. With only $2.7 billion left under the CHIPS Act, this maneuver suggests Washington is recycling earlier support rather than providing a new lifeline. The result is frustration on Wall Street, where hopes had been pinned on a more aggressive package.
The political theater adds further drama. Intel CEO Lip-Bu Tan, once derided by Trump as a national security risk, reportedly impressed the president in a recent White House meeting. Trump swiftly shifted from demanding Tan’s resignation to praising his achievements as an “amazing story.” Yet praise does little to soothe markets faced with share dilution, delayed projects, and the sense that Intel is increasingly reliant on government welfare rather than market strength. Meanwhile, rivals like AMD and Nvidia may find themselves in an even stronger competitive position as Intel struggles to regain momentum.