US government announces 10% stake in chipmaker Intel

Friday’s announcement comes after White House Press Secretary Karoline Leavitt called the proposal “a creative idea that’s never been done before” earlier in the week.

The Trump administration recently ordered Nvidia and AMD to give the government a 15% cut of the revenue from AI chip sales to China, according to reports.

While the approach is considered unusual, Jacob Feldgoise, a Senior Data Research Analyst at Georgetown University’s Center for Security and Emerging Technology, drew parallels between the equity stake and the previous approach of giving Intel grant funding.

“It’s still in service of the same overall objective which is taking a more direct role in private markets to advance US economic and national security objectives, particularly around maintaining technological leadership – or really regaining it – when it comes to semiconductor manufacturing,” Mr Feldgoise told the BBC.

The deal is considered rare in the modern era, but not without precedent.

During the Great Financial Crisis in 2008, the US government took a majority stake in automaker General Motors which was poised to enter into bankruptcy protection.

It eventually exited its position, incurring a loss of about $10bn.

Mr Feldgoise said the Trump administration took a similar approach earlier this year in a deal with MP Materials, a Nevada-based company that mines rare earth metals.

That agreement has come under scrutiny from public-interest watchdog groups amid revelations that the Department of Defense depended on a Cold War-era law to circumvent procurement and contracting laws.