Tim Cook was under pressure from the White House last summer when he fielded an unusual request.
Apple eventually won an exemption after committing to invest hundreds of billions of dollars more in the U.S. In the course of their meetings with Cook, President Trump and Commerce Secretary Howard Lutnick also brought up another American company: the troubled chip maker Intel.
Trump and Lutnick urged Cook to use Intel’s manufacturing plants, or fabs, to make some of Apple’s chips, according to government officials.
In one of the most remarkable examples of state capitalism in recent memory, the U.S. government became the chipmaker’s largest shareholder later that month when it converted $9 billion in federal grants into a 10% stake in the company.
Nearly a year later, Trump announced via Truth Social post that Apple would begin using Intel-made chips for some of its products, sending Intel shares to record trading highs. “I decided to help Intel because we need to design and build our Chips right here in America,” Trump wrote.
President Trump, with Apple CEO Tim Cook, presents Apple's announcement of a $100 billion investment in U.S. manufacturing last August. jonathan ernst/ReutersApple plans to have Intel make chips for both Mac laptops and iPhones, according to a person familiar with the negotiations. The connection between the tariff talks and a potential deal between Apple and Intel has not been previously reported.
Intel’s shares have more than quadrupled since Lip-Bu Tan took over as its CEO in March 2025, promising to cut spending, reinvigorate its product lines and attract game-changing customers to its contract manufacturing business, or foundry.
The company’s stunning resurgence is partly good luck: the AI boom recently entered a new phase that demands huge quantities of the computer chips known as CPUs, Intel’s specialty. But the Trump administration’s financial and strategic patronage has been the more crucial factor.
The administration has taken a hands-on approach to the company, twisting the arms of major potential customers and partners including Apple, Nvidia and Elon Musk’s SpaceX, all of which have signed deals with Intel since the government stake was announced.
Tan has been visiting Washington about once a month to meet with officials from the Commerce Department, Intel and U.S. government officials said. Tan also talks on the phone regularly with Lutnick, updating him on customer relationships and business conditions.
Bill Frauenhofer, the veteran semiconductor industry investment banker who serves as the administration’s chips czar, is even more in the weeds of Intel’s business. He gets a briefing from Chief Financial Officer David Zinsner every quarter and members of his staff meet regularly with Intel executives in Washington and at its Santa Clara, Calif., headquarters, keeping tabs on the progress of new manufacturing technologies.
Created with Highcharts 9.0.1Intel share-price under CEO Lip-BuTanSource: FactSetAs of July 9
Created with Highcharts 9.0.1April 2025'260255075100125$150
Even as big questions remain about Intel’s ability to deliver long-term consistency to its customers and regain its mantle of chipmaking innovation, the Trump administration’s unprecedented involvement in helping to steer the strategy of a private-sector tech company underscores the power of government to create national champions in strategically vital industries.
“From a technology perspective, it really seems like Intel is gaining credibility and confidence,” said Jacob Feldgoise, a senior research analyst at Georgetown University’s Center for Security and Emerging Technology. “With each new customer commitment and each new fabrication process they unveil, the signs are looking better and better.”
One of the original firms that gave Silicon Valley its name, Intel dominated the global semiconductor industry from the 1980s through the early 2000s, designing and making the chips that powered the PC and early internet eras. The company fell behind during the rise of the mobile internet and ceded ground to rivals making processors for smartphones, data center servers and other devices in recent years.
Today, the company consists of two main businesses: its product segment, which designs and sells its own chips, mainly CPUs for personal computers; and its foundry, which manufactures chips in the U.S., Ireland, Israel and Malaysia, both for Intel and for other designers.
An Intel chip Hannibal Hanschke/EPA/ShutterstockThe seeds of Intel’s government-supported renaissance were planted last summer, when Tom Cotton, the conservative U.S. senator from Arkansas, publicly criticized Tan as being compromised by what he described as uncomfortably close ties to China.
Tan for decades had invested in China’s tech sector through his venture fund, Walden International, and counted Chinese tech firms and government agencies as customers when he was CEO of Cadence Design Systems, a semiconductor software company.
Cotton’s criticism caught the president’s attention. In early August, Trump called for Tan to resign in a social-media post. The company sprang into damage-control mode, and Tan was soon sitting in the Oval Office, trying to persuade Trump that he was not a Chinese spy.
The charm offensive worked. Trump took a liking to Tan, whom he views as a “winner,” according to people familiar with the president’s views. After meeting with Tan at the White House, Trump proposed a government stake.
“Intel has been left behind,” Trump said at the time, and vowed to help the company recover its bearings.
The first fruits of Trump’s matchmaking appeared in September, when Nvidia announced it would invest $5 billion in Intel and buy its custom data center chips. Nvidia CEO Jensen Huang called the deal a “historic” partnership.
In April, Musk followed suit, announcing that Intel would join his ambitious Terafab manufacturing initiative to help “design, fabricate, and package ultra-high-performance chips at scale.”
The Trump administration’s heavy hand in deals with Apple, Nvidia and others could set a bad precedent, especially if Intel fails to fix its foundry business, said Scott Lincicome, a lawyer who specializes in trade and industrial policy at the libertarian-leaning Cato Institute. “Being the government’s darling only works as long as you’re doing well,” Lincicome said. “The risk for Tan is that if things start going south, politicians work on short timelines.”
While the administration’s boosterism has played a key role in improving Intel’s fortunes, Tan has also instituted sweeping changes and made key hires that have helped the company sharpen its focus and instill confidence both internally and among potential partners, according to current and former Intel executives, government officials and customers.
In September, Tan overhauled Intel’s reporting structure and established a new Central Engineering Group, hiring Srinivasan Iyengar, the top silicon engineer at Cadence, to consolidate custom chip design efforts under one team.
Tan, shown here after a White House meeting last August, has made changes across Intel. Alex Wroblewski/Bloomberg NewsIn their meetings with Intel executives, Commerce officials—who want more chipmaking on U.S. soil, rather than in Asian countries such as Taiwan, South Korea, Japan and China — have expressed keen interest in the foundry business. Government officials are closely tracking the progress of the firm’s newest manufacturing initiatives.
The administration is also pushing Intel to expand capacity at a New Mexico plant that produces what’s known as advanced packaging, or arrays of smaller chiplets that can be combined to function as a single custom semiconductor, according to government and company officials.
Intel and the government both view advanced packaging as the company’s best chance to compete with rival Taiwan Semiconductor Manufacturing, the world’s biggest fabricator of advanced AI chips, officials said.
In a January earnings call, Zinsner, the CFO, predicted that the foundry business would start seeing billions of dollars in revenue in the near-term from advanced packaging, a prospect he called “way more exciting than even I had expected.”
Tan has been on a hiring spree, poaching executives from competitors including Samsung and SK Hynix, aimed at making Intel’s foundry—which reported $10.4 billion in operating losses over the last four fiscal quarters—more competitive with rivals like TSMC. In recent years, outside customers have largely lost confidence in Intel Foundry’s ability to produce reliable quantities of usable silicon wafers.
Tan has also given more responsibility to Naga Chandrasekaran, a Ph.D engineer with a deep technical knowledge of semiconductors who has over the past year become the foundry’s most important salesman, people inside Intel say.
The partnerships with the Trump administration and others have provided another benefit: cash. Intel executives say that without the immediate infusion of capital that came from the government’s conversion of $9 billion in federal grants into equity—along with the $5 billion from Nvidia and $2 billion that Japanese investment firm SoftBank injected into Intel in late August—the company would have had to significantly cut capital expenditures over the past year.
Instead, Intel has kept capex spending relatively consistent over the past year, and shifted its spending, at Tan’s direction, largely from building new chip plants to buying precision fabrication tools and other equipment, allowing the company to increase production of high-selling products, such as laptop and data-center CPUs.
In April, the company reported that surging demand for CPUs had driven quarterly sales in its important data-center segment up 22% year-over-year, to $5.1 billion—although the company still reported a net loss of $3.7 billion for the quarter.
Alphabet’s Google Cloud unit announced in April it was placing a large order of Intel’s Xeon CPUs to power its data centers for so-called agentic workloads, or the type of computing required by large enterprises using AI tools.
Google says that it has grown more confident in Intel because of the changes Tan has made in how it responds to customer needs and customization requests.
“When they listen to our feedback and execute against it, that makes us even more excited to partner with them,” said Mark Lohmeyer, vice president and general manager of AI and Computing Infrastructure at Google Cloud, in an interview.
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Appeared in the July 11, 2026, print edition as 'The White House Made Fixing Intel Its Pet Project. It’s Working.'.