TechCrunch Daily Crunch Why the US government is taking a stake in Intel
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Sep 4, 2025 The U.S. government is making strategic investments in Intel to boost its AI and semiconductor sectors. The Trump administration's initiatives include tariffs and equity stakes aimed at restoring domestic manufacturing. Intel is undergoing a major turnaround, facing regulatory challenges while forming partnerships with the government. Additionally, potential government equity in Intel opens doors for future funding. Meanwhile, exciting startup innovations arise, such as grocery delivery partnerships and quality-driven initiatives in India.
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Government Pushes Chips Back To The U.S.
- The Trump administration is using policy and funding to push semiconductor manufacturing back to the U.S. in service of AI dominance goals.
- Converting a grant into a 10% equity stake in Intel signals a new, active government role in strategic tech supply chains.
Intel's Foundry Journey And Setbacks
- Intel launched a foundry business in 2021 with a $20 billion Arizona plan and later tried to buy Tower Semiconductor for $5.4 billion.
- The Tower deal failed, Foundry stalled, and Intel later secured $7.86 billion in federal grants under the Chips Act.
Foundry Weakness Made Intel Vulnerable
- Intel Foundry struggled to attract major customers and faced internal pressure to spin out amid slowing growth and layoffs.
- Leadership changes and scaled-back fabrication projects left Intel vulnerable and opened the door to government intervention.