OPINION: The government's 'passive' Intel stake heightens their commitment to each other and winning the chip wars

“Passive investment” and “equity stake” is how Intel is describing the U.S. government’s direct investment in the company, less than a year after the company was awarded roughly $11 billion in computer chip production grants.

One grant covered $3 billion in direct CHIPS and Science Act funding to expand the U.S. government’s trusted network of semiconductor suppliers, while the remaining $7.86 billion block supports commercial chip manufacturing projects.

Intel has yet to be paid $8.9 billion of those grants and that figure is being used to describe the government’s stake in the company. As of Friday, the government is becoming Intel’s largest stockholder, owning 9.9% of the shares.

Some explanation of this unique pact is in order. The government has no board of directors representation, or other governance or information rights.

The government also has agreed to vote with Intel’s board of directors on matters requiring shareholder approval, with limited exceptions not yet fully laid out.

Within the corporate governance context, Intel and the U.S. government can absolutely call their arrangement a passive investment and equity stake.

Intel still essentially has full control over its day-to-day operations and, on the surface, it seems the U.S government cannot directly initiate changes in leadership if the company’s troubles persist.

But now they are even more committed to each other and this reminder also is in order:

The U.S. government has been far from “passive” in its prioritization of computer chips and the desire to make this country the world leader in making them again. Whichever country leads the world in making chips has a clear advantage in the technology ecosystem.

Check out the Semiconductor Industry Association’s investment tracker here to get a snapshot of what companies in the computer chip ecosystem have announced since 2020.

Direct investments from the Commerce Department have totaled $32.5 billion in grant awards and $5.85 billion in loans, according to the SIA’s data.

Two 2025 Washington Technology Top 100 companies are in that SIA tracker, those being BAE Systems Inc. (Company No. 23) and SpaceX (Company No. 40). This is a reference point to note how the government thinks about the importance of chips as a customer.

In December 2023, BAE became the first recipient of direct funding under the CHIPS and Science Act. While SpaceX was awarded a $17.3 million grant from Texas’ Semiconductor Innovation Fund in March to expand a chip production facility in that state.

We also have to point out that Intel’s lineup of computer chips, as well as those of competitors AMD and NVIDIA, would absolutely qualify as dual-use technology.

AMD and NVIDIA are also under unique arrangements with the U.S. government that is well-explained here by Financial Times. Intel’s technological and financial difficulties are also better-explained elsewhere also.

But access to capital and a new, albeit partial owner, that wants to see the recipient of its investment succeed are important markers for Intel. The company needs backing for its ambitious U.S. factory expansion push and efforts to ramp up high-volume chip production.

Softbank is also putting $2 billion into Intel to aid in those efforts to build out capacity, all with the idea of building what Intel’s current and prospective customers want.

Intel needs a new, large enterprise customer it can point to as a sign that the turnaround is working.

Could its largest stockholder turn out… eventually… to be that kind of customer?

Always remember the government and Intel are committed to each other when following this storyline.

See the CNBC report below: