BusinessJul 13, 2026
Intel: The Chipmaker Washington Couldn't Afford to Lose
Industrial Policy
Rhea Lobo
Discover
Intel got saved by a Truth Social post and that's the most important fact about the company's investment case right now.
Lip-Bu Tan took the CEO chair in March 2025 with a mandate to cut costs, rebuild credibility, and drag Intel's foundry business back into relevance.
He's done all of that. But the government's matchmaking role has been the more decisive factor. Trump converted $9B in federal grants into a 10% equity stake, making the US government Intel's largest shareholder.
That's a structural ally, and it has changed the calculus for every potential customer who wants to stay on Washington's good side.
Apple, Nvidia, and SpaceX didn't come to Intel because its foundry suddenly became the best in the world. They came because the White House made it a priority.
Trump personally urged Tim Cook to use Intel's fabs during tariff negotiations, and Cook (facing potential 100% semiconductor tariffs) agreed.
Apple now plans to use Intel for chips in both Mac laptops and iPhones. Nvidia committed $5B and signed a deal for custom data center chips.
The business results are starting to reflect it. Data-center revenue jumped 22% year-over-year to $5.1B in Intel's most recent quarter, powered by surging demand for CPUs.
Google Cloud placed a large Xeon order for agentic AI workloads. Intel also committed $5.7B to upgrade its Irish campus, its most advanced European facility, with the majority of spending hitting by end-2027.
The foundry still lost $10.4B over the last four fiscal quarters, but the revenue pipeline is no longer empty.
Tan has also made real internal changes. He built a Central Engineering Group and poached executives from Samsung and SK Hynix. He shifted capex away from building new plants and toward precision fabrication equipment, letting Intel increase output of high-demand products faster.
The cash to do any of this (without slashing capital expenditure) came from the government's $9B conversion, Nvidia's $5B, and a $2B injection from SoftBank.
The risk here is specific, and skeptics name it clearly. Intel's foundry has bled credibility for years, outside customers repeatedly lost confidence in its ability to deliver reliable wafer volumes.
Winning Apple and Nvidia on a handshake brokered in the Oval Office is not the same as proving you can manufacture at scale consistently. If Intel stumbles on delivery, the government can't force customers to stay.
"Being the government's darling only works as long as you're doing well. The risk for Tan is that if things start going south, politicians work on short timelines."
Scott Lincicome, Cato Institute
The foundry's best near-term shot is advanced packaging, where Intel sees a faster path to competing with Taiwan Semiconductor Manufacturing.
CFO David Zinsner called the advanced packaging revenue outlook "way more exciting than even I had expected."
Intel's shares have more than quadrupled since Tan took over. The market has already priced in a recovery.
What it hasn't fully priced in is durability, whether Intel can hold Apple and Nvidia as customers once the political pressure fades. Tan's operational changes buy credibility.
The government's involvement buys time. The bet is that Tan uses the time well enough that customers stay by choice.
That's not guaranteed. But right now, no other chip company has a shareholder who also controls tariff policy.
