Inside Intel's Deal With the U.S. Government

Summary

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The Journal. — "Inside Intel's Deal With the U.S. Government"

Date: August 27, 2025
Hosts: Jessica Mendoza & Robbie Whelan
Podcast by: The Wall Street Journal & Spotify Studios

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Episode Overview

This episode dives deep into the dramatic and unprecedented deal between Intel—the iconic American chipmaker—and the U.S. government. Host Jessica Mendoza, joined by WSJ reporter Robbie Whelan, explores how political pressure, international intrigue, and industrial policy converged to make the U.S. government Intel's largest shareholder. The episode reveals insider perspectives on the White House's motives, the characters behind the scenes, and what this all means for the future of tech and state intervention in business.

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Key Discussion Points & Insights

1. The Crisis at Intel Begins (00:05–07:45)

• President Trump's Online Call for CEO’s Resignation
  • Trump accused Intel CEO Lip Bhutan of being "highly conflicted" because of past business ties to China and demanded his resignation via Truth Social.
  • Notable quote:
    • Robbie Whelan: “Five minutes after this segment runs, he goes on to Truth Social and posts this really dramatic message.” (06:18)
• Backdrop: Intel’s Decline
  • Intel, once a titan in chips, has been lagging behind rivals like Nvidia and TSMC, struggling with a declining stock and failed attempts to remain competitive in both chip design and manufacturing.
• Immediate Fallout
  • Intel's board goes into "full blown panic," fearing for the CEO’s position and company’s future amidst this very public challenge.
    • Robbie Whelan: “My understanding is it was full blown panic. The board starts freaking out. He is very rattled by this.” (07:45)

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2. The Meeting That Changed Everything (08:00–11:09)

• Tan’s Oval Office Strategy

  • Lip Bhutan's advisors tell him to clear his name and tie Intel’s fate to America’s, stressing loyalty to Trump's manufacturing agenda.
  • Notable quote:
    • Robbie Whelan: “You’ve got to convince [Trump] you’re not a Chinese spy… and convince him it’s in his interest long term to make sure Intel does not fail.” (08:06)
  • During the meeting, Tan emphasizes his accomplishments in China but vows loyalty to the U.S. and supports reshoring manufacturing.
  • Trump responds positively, ultimately backing off public criticism.
    • Robbie Whelan: “He spoke Trump's language. He gave his endorsement to the president's plan. And the meeting went fantastically well.” (10:08)

• White House Motives

  • Trump’s team, especially Commerce Secretary Howard Lutnick, seeks greater leverage over the CHIPS Act grants (money already given to chipmakers under the prior administration).
  • They want more than the status quo—actual skin in the game, not just promises of US manufacturing.

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3. Anatomy of the Intel Deal (12:39–17:16)

• Howard Lutnick’s Role

  • Lutnick spearheads negotiations, seeking out ways to secure a better deal for taxpayers beyond the previous administration's grants.
    • Robbie Whelan: “He’s been going around trying to put his own personal stamp on the CHIPS Act, sort of retrade some of these deals.” (12:46)

• Intel’s Struggles Limit Bargaining Power

  • The government recognizes Intel’s inability to match the increasing manufacturing commitments made by healthier rivals, pushing for another solution.

• The New Arrangement: Equity for Dollars

  • The U.S. government converts nearly $9 billion in CHIPS Act grants into a 10% stake in Intel, making it the company’s largest shareholder.
    • Robbie Whelan: “The solution they came to was, look, we should be getting a share in this company. So when the company profits, eventually, we hope we will share in that profit as well.” (13:17)
  • Memorable moment:
    • President Trump signs the deal with his name “in big letters” on the documents, both proud and symbolic. (01:16–01:29)
    • Lip Bhutan: “He walked in wanting to keep his job and he ended up giving us $10 billion for the United States. So we picked up 10 billion.” (01:29)

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4. Details & Implications of the Agreement (15:13–18:38)

• How the Deal Works
  • The government's 10% stake is non-voting: no board seat or direct governance role.
    • Robbie Whelan: “The administration has said that the government will not have a seat on the board and will not be directly involved in governance decisions.” (16:04)
  • However, an "open line of communication" between government and company management is guaranteed.
• The ‘Poison Pill’ Clause
  • If Intel loses at least 51% of its manufacturing business, the U.S. gets an additional 5% of Intel at a discount—set up to firmly incentivize keeping jobs and production domestic.
    • Jessica Mendoza: “A poison pill… says that if Intel loses at least 51% of its manufacturing business, the US government will receive an additional 5% of the company at a discounted share price.” (16:47)
• Future Government Involvement
  • The Trump administration might also push other tech companies to source their chips from Intel, strengthening domestic supply chains.
    • Robbie Whelan: “The Trump administration is going to do its best to help Intel find some customers for this manufacturing capacity.” (17:16)
• Sector-Wide Ramifications
  • Other chip companies like TSMC express anxiety over whether similar deals could be forced upon them. Lutnick reassures compliant companies they're not at risk.
    • Robbie Whelan: “There was a brief panic… Are they going to take us over next?... Secretary Lutnick came out… [to say], they should not worry.” (17:46)

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5. What This Means for U.S. Business Policy (18:31–19:24)

• A New Precedent
  • The episode closes reflecting on how this signifies a major shift: the U.S. government isn’t just handing out subsidies but is willing to take direct ownership stakes in vital industries.
    • Robbie Whelan: “If [tech CEOs] hadn’t gotten the message by now… Now they know that’s the strategy… the Trump administration is willing to employ to make sure their agenda succeeds.” (18:38)

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Notable Quotes & Memorable Moments

• Trump’s Opening Move:
  • “Five minutes after this segment runs, he goes on to Truth Social and he posts this really dramatic message.”
    — Robbie Whelan (06:18)
• Advising Intel’s CEO:
  • “You’ve got to convince him you’re not a Chinese spy…convince him that it’s in his interest long term to make sure that Intel does not fail.”
    — Robbie Whelan (08:06)
• The Art of the Deal:
  • “He walked in wanting to keep his job and he ended up giving us $10 billion for the United States. So we picked up 10 billion.”
    — Lip Bhutan (01:29)
• Government’s New Role:
  • “We should be getting a share in this company. So when the company profits, eventually, we hope we will share in that profit as well. There shouldn’t be just a free lunch.”
    — Robbie Whelan (13:17)
• State Direction in Tech:
  • “Now they know that that’s the strategy or at least one of the strategies that the Trump administration is willing to employ to… make sure that their agenda succeeds.”
    — Robbie Whelan (18:38)

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Timeline of Key Segments

• 00:05–01:40: Introduction and summary of the crisis at Intel
• 03:42–05:58: Introducing major players & the scandal’s origins
• 06:18–07:45: Intel’s decline and Trump’s public challenge
• 08:00–10:24: The pivotal White House meeting
• 10:45–11:09: White House’s broader industrial agenda
• 12:39–14:14: Commerce Secretary's approach to chip companies
• 15:13–16:35: Details of the government stake and deal structure
• 16:38–17:39: The “poison pill” and sector-wide implications
• 18:31–19:24: Reflections on government-business partnerships

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Conclusion

This episode offers a rare, insider look at how American technology, national security, and politics intersect in high-stakes boardrooms and backchannels. It reveals a bold new approach where government doesn't just regulate or subsidize but becomes an active shareholder, setting the stage for even closer ties—or conflicts—between Washington and Silicon Valley in the years ahead.

Transcript

[Jessica Mendoza]

For the past few weeks, intel, the American chips company, has been on a roller coaster. Our colleague Robbie Whelan has been covering it.

[Robbie Whelan]

It's really been a wild and crazy ride. And I'm happy to tell you all about.

[Jessica Mendoza]

Started earlier this month with a post from President Trump calling for Intel CEO Lip Bhutan to to resign over business ties in China.

[Robbie Whelan]

It says the CEO of Intel is highly conflicted. Capital letters conflicted and must resign immediately.

[Jessica Mendoza]

Tan quickly tried to put out the fire, flying to Washington to meet with the President in the Oval Office.

[Robbie Whelan]

And they have this like hour long meeting where he basically says, look, my ties to China are in the past.

[Jessica Mendoza]

About a week later, intel announced a major deal with the Trump administration.

[Robbie Whelan]

Friday was like the culmination of a total rollercoaster ride for Intel.

[Lip Bhutan]

And I said, I think it would be good having the United States as your partner. He agreed and they've agreed to do it. And I think it's a great deal.

[Jessica Mendoza]

Under the agreement, the US Government becomes a partial owner of intel. It's getting a 10% stake in the company. And Robby has the inside story on how it all went down.

[Robbie Whelan]

And President Trump kind of like in a half joking, half serious way said, maybe I should put my signature on these papers too. I've actually seen the papers. He put his name in big letters, Donald Trump. So he's very pleased about this and.

[Lip Bhutan]

I think it's a great deal. He walked in wanting to keep his job and he ended up giving us $10 billion for the United States. So we picked up 10 billion.

[Jessica Mendoza]

Welcome to the Journal. Our show about money, business and power. I'm Jessica mendoza. It's Wednesday, August 27th. Coming up on the Inside, Intel's deal with the US government.

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[Jessica Mendoza]

Behind the blockbuster deal granting the US government a 10% stake in intel, there is a whole cast of characters.

[Robbie Whelan]

It's a little bit hard to keep track of how many people are involved here, but would you want to hear the dramatist Persona?

[Jessica Mendoza]

Sure. The dramatis Persona.

[Robbie Whelan]

So, okay, so there's a cast of characters here that's very interesting and it involves some of the most powerful people in the world.

[Jessica Mendoza]

There's Intel CEO Lip Bhutan.

[Robbie Whelan]

He's a Malaysian born Singapore raised US Citizen, but he has some Chinese heritage and he's very close with a lot of businesses and a lot of officials in China.

[Jessica Mendoza]

There's of course President Trump just took.

[Robbie Whelan]

Office, wants to make American manufacturing great again, has this really specific America first industrial agenda that he's been pushing.

[Jessica Mendoza]

And Howard Lutnick, the commerce secretary, he's a former banker.

[Robbie Whelan]

He's one of Trump's most trusted deputies. And he is responsible for doing a lot of the deals that the president has been orchestrating.

[Jessica Mendoza]

And there's also Tom Cotton, a Republican.

[Robbie Whelan]

Senator from Arkansas who's been very vocally critical of China and the idea of us selling technology, especially technology that can be used in combat situations to the Chinese. And he's been very critical of companies that do that.

[Jessica Mendoza]

For the story, Robby and our colleagues at the Wall Street Journal spoke to current and former intel executives, people in the White House, lobbyists and company advisors. One of the things Robbie learned was this whole series of events started while Trump was watching TV.

[Robbie Whelan]

On Thursday, August 7th, Donald Trump was doing a thing that he loves to do in the morning, which is he watches his favorite cable news shows and he gets a lot of ideas from these shows. The show he was watching that particular morning is called Mornings with Maria. It's on the Fox Business Network. It's hosted by Maria Bartiromo.

[Maria Bartiromo]

But look at intel and how far it has fallen.

[Robbie Whelan]

Arkansas Senator Bartiromo is talking about Tom Cotton, the senator from Arkansas, and a letter he has recently written and made public to Intel's board. Tom Cotton is pressing the board of.

[Maria Bartiromo]

Intel right now about its new CEO and his potential ties to Communist China.

[Jessica Mendoza]

In Cotton's letter to Intel's board, he called out Tan's previous job as CEO of a company called Cadence Design Systems. Earlier this year, Cadence pleaded guilty to selling banned technology to a Chinese national defense university. The company has since settled with the Justice Department. Those sales happened while Tan was CEO.

[Robbie Whelan]

The president is listening, he's tuned in and he hears this. And then if you look at the timestamps on it, it's really remarkable. Five minutes after this segment runs, he goes on to Truth Social and he posts this really dramatic message.

[Jessica Mendoza]

The message was that Tan should resign. In a public statement about his previous company, Tan said, quote, we are engaging with the administration to address the matters that have been raised and ensure they have the facts. Trump's post came just five months into Tan's tenure as intel CEO. It was also a time when the company was trying to come out of a longtime rut.

[Robbie Whelan]

Intel is in what can only really be described as sort of a multi year downward spiral.

[Jessica Mendoza]

Intel has struggled to keep up with other chip giants like Nvidia and Taiwan Semiconductor Manufacturing Company, or tsmc. While these chip companies decided to specialize in either designing chips or manufacturing them, intel tried to keep doing both, and it lost an edge in both markets. As a result, over the last few years, Intel's stock has plummeted and it's lost out on billions of dollars. The company brought Intan earlier this year to try to right the ship. And so the hope, it sounds like with intel turning to Tan as CEO was that we need something to end this period of chaos. And so five months in, when Trump calls for Tan to resign, I mean, what was the reaction?

[Robbie Whelan]

My understanding is it was full blown panic. It was, the board starts freaking out. He is very rattled by this. They immediately reached out to Susie Wiles, the chief of staff at the White House, and said, look, we've got to talk to the president about this.

[Jessica Mendoza]

The company set up a meeting with Trump just a few days later. And before that meeting, Tan strategized with.

[Robbie Whelan]

His team and he's huddled with his advisors in this kind of state of frenzy and nervousness and anxiety. And he's getting this advice from them. They're seizing. What should I do? How can I get the president to back off and stop criticizing me publicly, because you have to understand that a president, a sitting president, calling for a CEO of a major American company to resign in public is pretty unprecedented. So his advisors tell him, they say, listen, you've got to do two things. Number one, you've got to convince him you're not a Chinese spy, because that's essentially what you've been accused of. And number two, you've got to convince him that it's in his interest long term to make sure that intel does not fail and come to some sort of arrangement where the government's fortunes and Intel's fortunes are tied together. And they say to him, you know, don't worry, he will hear you out. He might have called for you to step down. But President Trump loves talking to CEOs.

[Jessica Mendoza]

I mean, it's his world, right? That's Trump's world, or CEOs, and high profile, like, billion dollar businesses.

[Robbie Whelan]

He envisions himself as this sort of master dealmaker, and he likes being around people who he sees as also smart dealmakers. He thinks that they're of his tribe. And so Tan calms down a little bit and he understands what he has to do.

[Jessica Mendoza]

So Tan goes to the Oval Office for this meeting. How did it go? What did he say?

[Robbie Whelan]

I was told that he told the president, I went to China years ago and I became the most successful venture capitalist in China. I was very, very successful there. And the way he said that is important. He didn't just say, oh, I used to work in China. He said, I was very successful in China. The other thing that's important to know is that he didn't go in and say, look, I'm head of a multinational company. We need to be treated as such and given the leeway to operate in whatever country we want, and basically said, I think that intel is a great American company. I'm very dedicated to it. And I'm also very dedicated to your approach to manufacturing, to reshoring jobs in the manufacturing sector, to making American factories great again. He really signed on. He gave his.

[Jessica Mendoza]

He's speaking the language.

[Robbie Whelan]

He spoke Trump's language. He gave his endorsement to the president's plan. And this meeting went fantastically well. At the end of it, Trump said, look, I'm not going to give you any more grief about stepping down. I'll back off.

[Jessica Mendoza]

Along with Trump and Tan, other members of Trump's cabinet were there, including Commerce Secretary Howard Lutnick. And so going into that meeting, sounds like Tan was going in there trying to make sure that he kept his job and that intel was in the good graces of the Trump administration, of President Trump. What about the Trump administration? What did they think they would get out of that meeting?

[Robbie Whelan]

Well, that's a really good question. So Secretary Lutnick has been on this sort of interesting project recently, which is that. So the Trump administration views the CHIPS act, this deal that gave billions of dollars to intel as a Biden project. And they're not fond of the idea of continuing to just sort of ride this train that the Biden administration set up for the tech sector.

[Jessica Mendoza]

The CHIPS act allocated billions of dollars to multiple chip companies, not just Intel. TSMC and Samsung got billions too. Among other things, that money was supposed to encourage the companies to make chips in the U.S. but the Trump administration wanted more than just domestic manufacturing investments from these companies. That's after the break.

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[Jessica Mendoza]

The person in charge of figuring out how to get better deals from chip companies was Howard Lutnick.

[Robbie Whelan]

Secretary Lutnick has been going around and making the rounds with these companies that got these grants and saying, look, would you mind committing to bigger investments in the U.S. we know that you are committed to bringing more jobs here, but we'd like to see more from you. So he's been going around trying to put his own personal stamp on the CHIPS act, sort of redo some of these deals, retrade some of these deals that they struck with the previous administration.

[Jessica Mendoza]

But his team had a hard time figuring out what the US could get from intel because the company has been in a downward spiral.

[Robbie Whelan]

And so he looked at intel or his team looked at intel and said, I wonder if we could get the same kind of increased commitment out of Intel. And the answer they came to was no. Intel is in such bad shape, they probably can't even, even if we ask them for a smaller, you know, small increase in their commitment to, to manufacturing investment in the US they probably wouldn't even be able to do it. They're in that bad a shape. And so what he wanted from this meeting was to come to some sort of arrangement where he could do the equivalent of what he did with these other companies like TSMC and sort of make sure that he was comfortable, that the chips act money was serving taxpayers well and that the money they were giving intel, the government was going to see some kind of good return on it. And the solution they came to was, look, we should be getting a share in this company. So when the company profits, eventually, we hope we will share in that profit as well. There shouldn't be just a free lunch.

[Jessica Mendoza]

Here's Lutnick in a video he posted to X announcing the deal with Tan.

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And we agreed, yes, that it would.

[Robbie Whelan]

Be fair that the same money that you give a company, America should have shares for it, because it's just fair.

[Jessica Mendoza]

So when Trump first said Tan should resign, was it really about China or was Trump trying to get intel to come to the table?

[Robbie Whelan]

That's the right question to ask. From my reporting, what I've been told by actually both sides is that regardless of whether or not Donald Trump actually wanted Lip Bhutan to resign over his China ties, what he sent out in that message on Truth Social on Thursday morning was an opening bid for these discussions. So making what essentially amounted to a threat against the CEO. I'd like you to resign. I think you need to step down. You're too conflicted. That was a really good way for him to arrive at the negotiating table with a distinct advantage over his. His partner.

[Jessica Mendoza]

As for the details of the deal, the US will convert the nearly $9 billion in grants that it already promised intel into that 10% stake in the company. This makes the US government Intel's largest shareholder. How has the CEO of Intel talked about this deal?

[Robbie Whelan]

He's been fairly cagey about it, except to say that he is very excited to work with the government as a partner. He is all in on the president's manufacturing agenda.

[Lip Bhutan]

This is a big, important historical agreement that we can work together. And then, more important, I don't need the grant, but I really look forward to have the US government be my shareholder and we can work together, make intel great, great again.

[Jessica Mendoza]

And what does it mean for the US to have a Stake in intel is like, is Lutnick going to be going to board meetings?

[Robbie Whelan]

So the administration has said that the government will not have a seat on the board and will not be directly involved in governance decisions. The president has sort of pledged at this point to kind of stay out of Liputin's way, to not sort of make demands. But you can sort of tell that behind the scenes there's going to be a relationship where it's like, if the government feels like it needs to exert pressure on this company, things aren't going well. They're going to have an open line of communication with Intel's management to sort of make their voice heard.

[Jessica Mendoza]

And there's one other thing folded into the deal.

[Robbie Whelan]

What they did was they put this provision in the deal that I'm told is viewed by both intel and the White House as what's called a poison pill.

[Jessica Mendoza]

A poison pill. One that would incentivize intel to keep its domestic chip making business. Because the provision says that if intel loses at least 51% of its manufacturing business, the US government will receive an additional 5% of the company at a discounted share price. That scenario would further dilute the value for investors and complicate the company's finances. But there are benefits for intel, too. The U.S. government could send more customers its way.

[Robbie Whelan]

So there's a sense, a real sense that the next step is the Trump administration is going to maybe urge or lean on some of the other big tech companies out there to use intel as their manufacturer. And our reporting shows that that is part of the plan going forward. The Trump administration is going to do its best to help intel find some customers for this manufacturing capacity that the government's asking them to build out.

[Jessica Mendoza]

Could the US Try to make deals like this with other companies that receive money from the Chips Act?

[Robbie Whelan]

Yes. First of all, President Trump has said that he would like to make more deals like this. But there was a brief panic when news started to leak of the intel stake. A lot of the other companies in the same industry, for example, tsmc, kind of started to get worried and we started hearing about this, like, who's next? Are they going to take us over next? Are they going to take shares in our company? Are they going to make us enter some deal that is dilutive to our shareholders? And there was a serious concern about that. So much so that Secretary Lutnick came out a few days ago and said, look, anybody who has sort of worked with us come to the table and complied with what we're trying to do on the CHIPS act specifically, they should not worry.

[Jessica Mendoza]

What does this moment tell us about how the Trump administration views the relationship between government and business?

[Robbie Whelan]

Yeah, I think that CEOs of companies, especially in the tech sector, if they hadn't gotten the message by now that this is an administration that wants very badly to be involved, to have a say, and in some cases, this is the extreme case. Right. Even own a big stake of their companies. Now they know. Now they know that that's the strategy or at least one of the strategies that the Trump administration is willing to employ to kind of make sure that their agenda succeeds.

[Jessica Mendoza]

That's all for today. Wednesday, August 27th. The Journal is a co production of Spotify and the Wall Street Journal. Additional reporting in this episode from Josh Dawsey, Nicholas G. Miller, Amriz Ramkumar and Lauren Thomas. Thanks for listening. See you tomorrow.