In July 2025, former Intel Chief Executive Officer Pat Gelsinger called for a US sovereign wealth fund to ‘keep America’s technological edge’. Just a month in, a US SWF has materialised under Donald Trump’s administration – owning 10% of Intel Corporation, the only American company manufacturing advanced chips on US soil.
Traditionally, sovereign wealth funds are state-owned investment funds that manage national surpluses. Norges Bank Investment Management, for example, manages Norway’s export surplus derived from its natural resource.
However, the US SWF is from a trade deficit country. It is not one single fund authorised by the legislature. Instead, it’s a strategy driven by executive power.
Unlike a conventional SWF, the US SWF has no formal, top-down asset allocation plan. That’s why in the months following Trump’s executive order for establishing the fund, the US SWF appeared first as an ad hoc collection of US stakes in business sectors, ranging from attempted control over TikTok to a golden share in the proposed Nippon Steel-US Steel merger, to equities in bitcoins formerly collected from various criminal and civil actions of the US government.
Advanced chip fabrication
Now, as the Intel case (and similar US investments like MP Materials) illustrates, the US SWF’s direct, active equity participation in strategic sectors of national security consideration is an increasingly clear and focused strategy.
On 22 August 2025, Intel made an equity-for-grants transaction with the Trump administration. Intel would receive a total of $8.9bn in awards from the US CHIPS Act and additional programmes, which gives the US government a 10% stake in the struggling chipmaker.
By turning the government grants into an equity investment, the Trump administration has turned support for Intel into a strategic financing mechanism. This move supports three critical aspects of the US’ emerging industrial and economic security strategy.
First, as a market signal that the US is committed to Intel’s long-term prospects. The Trump administration has been seeking ways to increase US market share in semiconductor manufacturing, and Intel remains the best hope for the US to compete with Taiwan Semiconductor Manufacturing Co. and Korea’s Samsung in advanced chip fabrication.
Once the king of chipmaking, Intel has struggled in recent years. After missing both the smartphone and artificial intelligence waves, it is losing out to firms like TSMC and ARM. Now US equity ownership can be viewed as a long-term bet, at a time when Intel is working to regain its manufacturing leadership.
Second, the US’ industrial strategy includes a ‘poison pill’ element to dissuade the company from fully exiting the manufacturing segment. TSMC is the dominant player in chip fabrication, especially advanced AI chips, so Wall Street may advise Intel to focus on chip design instead. But Intel pulling out of the manufacturing business would be detrimental to the government’s efforts to shore up domestic chip making for supply-chain stability reasons.
As part of the deal terms, the government has a warrant to buy an additional 5% of Intel shares if the company is no longer majority owner of its foundry business.
Third, a ‘crowd-in’ catalyst for public-private partnership. Encouraged by the US participation, Japan’s SoftBank announced its $2bn investment into Intel for about 2% of the company.
De-risking and defence
As White House Economic Adviser Kevin Hassett stated, ‘The government’s stake in Intel is part of a broader strategy to create a sovereign wealth fund that could include more companies’. Intel and MP Materials investments exemplify America’s evolving industrial policy implemented by the new US SWF – leveraging state capital both to de-risk strategic projects and to catalyse public-private investment partnerships, for the ultimate goal of achieving a resilient, ‘Made in the USA’ economy.
Similar to the Intel situation, the Department of Defense’s made $400m equity investment in MP Materials in July 2025, the only rare earth producer in the US. The DoD’s commitment has attracted $1bn in private financing from JPMorgan Chase and Goldman Sachs to build MP’s new ‘10X’ magnet manufacturing facility in Texas.
The Pentagon is becoming MP Materials’ largest shareholder, with a potential 15% stake and long-term offtake agreements to buy 100% of the magnets made at the company’s new facility. This investment enables the US to secure critical mineral flows, countering China’s dominance in this space.
Yet, there are sharp limitations to what government investment alone can accomplish. Even the $8.9bn US funding along with SoftBank’s $2bn is not that enough to fully finance Intel to build up its AI chip manufacturing capacity.
Foundry businesses take many years to build up, as illustrated by the struggles of TSMC’s US facility in recent years. With that as a reference, Intel may need to invest $10bn in each of the next five years if it is to succeed at making leading, cutting-edge chips.
Furthermore, Intel’s deeper problems include an outdated business model and a product lineup poorly suited to applications in AI. Private capital would only rush in when it’s clear that Intel is competitive again in the AI digital economy.
US deal with Intel critical for company
Intel needs the US’ help to follow through on its plan to open a new US manufacturing facility in Ohio, which has been repeatedly delayed – not only because of the company’s financial troubles, but also its lack of AI chip manufacturing orders from the biggest customers, such as Nvidia, AMD and Apple.
Therefore, US funding alone wouldn’t address all of Intel’s problems, but the Trump Administration might pressure chip designers like Nvidia, AMD or Apple to manufacture with Intel, at a time when the US is setting condition for those companies’ export licenses for China. In August, Trump negotiated an agreement in which Nvidia and AMD could resume selling their AI chips to Chinese companies. In exchange, the US government will take a 15% cut of sales.
What’s certain is more deals to expect for the US SWF, especially for US companies who are a regular recipient of subsidies or grants from the US. Such active, strategic positions may become a major part of the US SWF’s asset portfolio going forward. As Trump wrote in his Truth Social post, he will ‘make deals like that for our Country all day long.’
Winston Ma is Executive Director of the Global Public Investment Forum and Adjunct Professor at NYU School of Law.
This is part two of Ma’s Trump US SWF series. Read the first part here.
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