The U.S. government is exploring how to sell its large stake in Intel, a move signaled by President Trump's recent comment that a sale could happen “slowly over time without tanking the stock.”
This situation began in August 2025, when the government invested approximately $8.9 billion to acquire nearly 10% of Intel. This was a strategic rescue-style deal designed to bolster a critical American semiconductor company, supported by the broader industrial policy aims of the CHIPS Act. At the time, it was a move to stabilize Intel's future. Now, with the investment's value soaring to over $47 billion, the focus has shifted to realizing this massive gain for taxpayers.
The timing for this potential sale is no accident; it's the result of a powerful chain of events that dramatically increased Intel's stock price and liquidity. First, strategic developments laid the groundwork. Nvidia's $5 billion investment in late 2025 and the selection of Intel's Xeon 6 CPUs for Nvidia's premier AI systems in March 2026 solidified a compelling narrative: Intel's CPUs are crucial components in the AI revolution. Second, this narrative caught fire in April 2026, when Intel reported outstanding first-quarter earnings that far surpassed expectations. The stock surged nearly 30%, and average daily trading volume exploded, creating deep market liquidity. It is this surge in trading activity that makes an orderly sale of the government's 433 million shares now possible.
So, how could this be done without causing a market crash? The government would likely adopt a playbook used in past divestments, such as with General Motors and AIG. This involves using a pre-announced trading plan, like a 10b5-1 plan. By transparently stating its intention to sell a fixed portion of the daily trading volume (for example, 10%), the government could gradually sell its shares over 1-2 months. This approach minimizes surprises and allows the market to absorb the new supply smoothly, preventing the price from collapsing under the weight of the massive sell order, an effect known as overhang.
Importantly, this sale does not signal a retreat from national security priorities. The 2025 deal was crafted with foresight, including a key provision: a warrant that ensures the U.S. maintains influence if Intel's control over its domestic manufacturing (foundry) falls below 51%. This ensures that even as the government sells its shares, its strategic interest in a U.S.-controlled semiconductor supply chain remains protected. The sale is simply the profitable conclusion to a successful strategic investment.
- 10b5-1 plan: A pre-arranged trading schedule that allows company insiders or large shareholders to sell shares over time without being accused of trading on non-public information. It provides a clear, transparent plan to the market.
- Liquidity: The ease with which an asset, like a stock, can be bought or sold without significantly affecting its market price. High liquidity means there are many buyers and sellers, making it easier to handle large trades.
- Overhang: A market term for a large block of shares that is expected to be sold. The anticipation of this sale can put downward pressure on the stock's price, as investors worry about the increased supply.