Intel Corporation (NASDAQ: INTC) faces a shareholder lawsuit in the Delaware Court of Chancery seeking to unwind an August 2025 agreement that granted the U.S. government a 10% equity stake in the chipmaker. Shareholder Lawsuit Challenges Intel's 10% U.S. Government Stake
According to a Financial Times report on Wednesday, the plaintiff argues the arrangement was an "unlawful contract" that effectively handed Washington roughly $11 billion in Intel stock for "no meaningful consideration" amid alleged political pressure on management.
The lawsuit was filed by individual shareholder Richard Paisner and names Intel leadership as well as the United States Department of Commerce and Commerce Secretary Howard Lutnick, who were involved in the transaction.
Paisner's complaint alleges Intel's CEO and board acted to avoid "extortionary threats" and personal attacks, claiming executives prioritized "protecting their personal reputations" rather than shareholder interests.
Dispute Centers on CHIPS Act Grants and Subsidy Conversion
At the center of the dispute is Intel's August 2025 announcement that the U.S. government would take a direct ownership stake funded by converting $2.2 billion in grants under the CHIPS and Science Act and $8.9 billion in previously awarded but unpaid federal subsidies.
The lawsuit claims the arrangement was structured "so that" Intel CEO Lip-Bu Tan "could keep his job."
The filing also criticizes law firm Skadden Arps Slate Meagher & Flom, alleging it "simultaneously represented" the Commerce Department due to a separate agreement in which major Wall Street firms provided pro bono legal advice to the Trump administration to avoid being blacklisted. Skadden is not named as a defendant.
Intel declined to comment, while the Commerce Department and Skadden did not immediately respond to requests for comment, the FT report added.
Political Pressure Surrounding Intel Leadership
The complaint outlines the political backdrop surrounding the deal. In August, U.S. President Donald Trump publicly called on Tan-who was born in Malaysia-to resign, saying he was "highly conflicted" amid scrutiny from Republican lawmakers over his past investments in Chinese companies.
Tan subsequently made a rapid visit to the White House. Trump later softened his criticism, and the government stake in Intel was announced shortly afterward.
Tan became CEO in March 2025 after Intel's board removed former chief executive Pat Gelsinger during a multi-year effort to catch up with Taiwan Semiconductor Manufacturing Company Ltd. (NYSE: TSM) in advanced chip production and to attract external foundry customers.
Intel's foundry unit posted losses of $13.4 billion in the year before Gelsinger's departure. After taking over, Tan paused several construction projects, including a major planned manufacturing facility in Ohio, as the White House pushed for expanded domestic semiconductor production and opposed a potential sale of Intel's manufacturing business.
Intel Stock Edges Higher in Premarket Trading
INTC Price Action: Intel shares were up 0.99% at $45.70 during premarket trading on Friday, according to Benzinga Pro data.