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Intel faces a shareholder lawsuit accusing the chipmaker’s leadership of granting a 10 per cent stake to the US government because its chief executive and board members feared personal attacks from the Trump administration.
The lawsuit described the August 2025 transaction as an “unlawful contract that gives the US government $11bn worth of Intel stock for no meaningful consideration in response to extortionary threats by the government”.
The lawsuit, which seeks to unwind the deal that gave the government a 10 per cent take in Intel, highlights the administration’s unprecedented efforts to inject the federal government into private enterprises in sectors it sees as critical to national interests.
The case filed in the Delaware Court of Chancery by a small individual shareholder, Richard Paisner, claims Intel’s CEO and board were cowed by the threat of US President Donald Trump’s attacks.
Intel’s leadership failed to do what was best for shareholders, the lawsuit claims, because they were more concerned with “protecting their personal reputations, being free from attacks by President Trump and his supporters on social media and elsewhere”.
In August, Trump abruptly called on Intel chief Lip-Bu Tan, who was born in Malaysia, to resign because he was “highly conflicted” amid questions from Republican lawmakers about his history as an investor in Chinese companies.
The attack prompted Tan to make a hasty visit to the White House, where Trump rowed back on his comments.
Shortly after, it was announced the US would take a direct ownership stake in Intel. The government’s equity was funded by converting $2.2bn in grants under the Biden-era Chips Act, as well as $8.9bn in federal grants that had been awarded but not yet paid.
The lawsuit alleges that the deal was struck “so that Tan could keep his job”.
The suit also takes aim at Intel’s lawyers on the deal, Skadden, claiming the firm “simultaneously represented the Department of Commerce as a result of a similar shakedown by the Administration”.
Skadden was among a group of top Wall Street law firms that in 2025 cut a deal to provide pro bono legal advice to the Trump administration in order to avoid being blacklisted by the federal government. Skadden is not named as a defendant in the Intel case.
The lawsuit also names the US Department of Commerce and secretary Howard Lutnick, who were involved in the deal, as well as Intel board chair Frank Yeary, who retired from the board earlier this month.
Shares of Intel have almost doubled since the deal with the commerce department was struck, giving the California-based company a market capitalisation of almost $250bn.
Tan took over Intel in March 2025 after the company’s board abruptly ousted his predecessor Pat Gelsinger four years into an ambitious plan to catch up to TSMC in advanced chip manufacturing and win outside customers.
Losses in this so-called foundry business mounted to $13.4bn in the year before Gelsinger was forced out. Some analysts expected Tan to scale back the push to become a US national champion in advanced chipmaking or sell the foundry unit.
After taking the role, Tan paused several construction projects, including a major planned facility in Ohio. The Trump administration has pushed for more chipmaking in the US and opposed a sale of Intel’s manufacturing business.
Intel declined to comment. The commerce department and Skadden did not immediately respond to requests for comment.
Additional reporting by Aime Williams
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