The Trump administration has orchestrated an aggressive push to revive Intel (NASDAQ: INTC), leveraging its regulatory muscle and direct financial involvement to force partnerships with the biggest names in technology. The intervention, which includes converting $9 billion in federal grants into a 10% equity stake, has helped Intel's stock more than quadruple since CEO Lip-Bu Tan took over in March 2025. Yet, despite the surge and high-profile backing, the chipmaker still struggles to attract the large, paying external foundry customers essential for long-term success.
President Donald Trump and Commerce Secretary Howard Lutnick last year directly pressured Apple CEO Tim Cook during tariff negotiations on imported semiconductors. According to people familiar with the talks, the administration made clear it wanted Apple to use Intel's American manufacturing plants. Apple later avoided those proposed duties after committing to greater U.S. investment and is now preparing to let Intel produce selected chips for Mac computers and iPhones. The White House also pushed Nvidia and Elon Musk's SpaceX toward deeper collaboration. The government's involvement went beyond introductions: officials stayed in regular contact with Intel executives, monitored factory expansion, and restructured financial support. The conversion of grants into a 10% stake made Washington the company's largest shareholder—a level of ownership almost without precedent in a major American technology firm.
Private capital followed the government's lead. Nvidia invested $5 billion into Intel, while SoftBank Group contributed another $2 billion. That infusion has allowed Intel to maintain capital spending on chipmaking equipment rather than cutting back. CEO Lip-Bu Tan, meanwhile, has undertaken a sweeping internal restructuring. He reorganized engineering teams, brought in senior leaders from Samsung and SK Hynix, and shifted spending toward machinery for high-demand chips. The first tangible results are emerging: Intel's first-quarter data center revenue rose 22% year-over-year to $5.1 billion, driven by strong demand for Xeon processors. Google Cloud placed a large order for Xeon CPUs, citing confidence in Tan's leadership.
However, Intel's foundry unit tells a more cautious story. First-quarter foundry sales reached $5.4 billion, but the vast majority came from Intel's own product divisions. External customers generated less than $200 million, with a filing listing outside revenue at $174 million, up from just $31 million a year earlier. A big chunk of that growth came from accounting adjustments after Intel lost control of Altera, which became a customer on paper. CFO David Zinsner acknowledged the external business remains largely legacy wafer agreements. For the second quarter, Intel expects revenue of $13.8 billion to $14.8 billion and adjusted earnings of $0.20 per share.
The stock closed Friday down 2.4% at $109.68, while most other chip stocks gained. Still, the turnaround since March 2025 is dramatic. Yet analysts warn that factory expansion alone cannot guarantee success; Intel must convert the government-brokered relationships into sustained, high-volume orders from companies like Apple, Nvidia, and SpaceX. Without that, the recovery may prove fragile.
